The internet of things brings new opportunities for the insurance industry to assess risk, price more accurately and detect more fraud, but it also gives fraudsters new creative ways to commit fraud against us. Leading Insurer LV are warning their customers to be aware of the new types of fraud around. Here’s the latest from their press office;
What’s clear from our data is that we’re seeing an increase in some fraud trends.
Quote manipulation, ghost broking, identify theft and account takeover are all on the increase. Fraudsters are getting smarter, so much so that on some occasions they’re getting through front end identity and credit checks. Criminals are also able to use robotics technology to fire off multiple quotes in seconds until an insurer identifies the threat and blocks the device. Then the fraudster simply moves on to the next insurer.
False documentation and source coding is also a growing concern. Lots of insurers still request documentation to validate claims but we need to be aware. Source coding can be found on a simple YouTube search and it means any web based application such as an online account, bank account, pay/wage system and purchase receipts can be changed. The fraudster can print screen or print what looks like genuine documents.
While there are some issues, at the same time IoT does also allow insurers to stay ahead of the game. We can source data from databases in real-time, so instead of relying on customers to remember information and suspecting them if they make errors of memory, we can simply source the answers ourselves in real-time.
Within a crash, connected devices can also help assess what really happened, whether that’s via an engine management system or telematics device. The IoT can track social media posts within a radius of an event to help validate extraordinary events such as a storm or flood.
The world is changing and as an industry we need to keep up. We must unlock the power of data analytics and machine learning to support our investigators to make better decisions. To achieve this, it’s imperative that we invest in the right tools.
Within LV=, we’re taking steps to protect our customers, our employees and our business from fraudulent activity.
INTERNET OF THINGS RISKS
Back in August 2017 The Telegraph reported that IT security experts deemed some smart meters as being far too vulnerable to hacking, with supply cut-off and fake billing being amongst the risks.
Earlier in November Trading Standards warned that the new generation of smart TVs and devices such as Amazon’s Echo, were also very easy to access. Some were being left with factory-set default passwords by users.
Many consumers seem unaware that gadgets like smart TV sets, speakers, or home control units are highly effective recording devices. Users must be extremely careful about the privacy settings on each device.