Although crash-for-cash claims are in decline, thanks in part to the increasing use of cheap dashcams by UK drivers, there are still high costs for insurers when it comes to sorting the genuine claims from the fake scams. Now Horwich Farrelly, the leading insurance industry law firm, has launched the first fully automated fraud investigation solution designed to give motor insurers a cost-effective way to specifically tackle vehicle-data related fraud and drive down the cost of motor claims.
With the resources required to review potentially fraudulent claims often onerous and the costs to outsource investigations also high, Horwich Farrelly’s ‘Car Wash’ applies innovative technology and novel algorithms to streamline the process. For cases the firm concluded in 2018, ‘Car Wash’ saved the insurance industry over £2.4 million.
‘Car Wash’ compares claims against a wide range of data from a variety of sources to reveal a series of ‘red flags’ that enable further investigation of those deemed most likely to be fraudulent. The system considers over 30 potential indicators of fraud, including MOT history, mileage data, road tax records, change of keeper dates and car adverts – as well as Horwich Farrelly’s own historical fraud data – within an insurer’s database of claims. If potential fraud, including suspected staged incidents and fraud rings, are found then the system highlights these – automatically.
Since first being piloted in January 2018, Horwich Farrelly has run over 50,000 claims through ‘Car Wash’ and the results have been both impressive and – for some – surprising, particularly in claims were no other evidence of fraud was predicted. Over 4,500 fraud matches have been detected by the system to date.
Rick Preston, Head of Horwich Farrelly’s Intelligence Team explains the background to the development of ‘Car Wash’: “Since 2017 we had been investigating how we could combine the wide variety of data sources that help us to identify fraudulent claims in a much more streamlined way so as to speed up the process and reduce client cost. We saw a growing number of positive matches on credit hire claims that were the result of intelligence searches against commonly used vehicle databases. We therefore, used this insight, and some really eye-catching results from a number of pilots, to create a product that would interrogate every claim, automatically.
“The result is ‘Car Wash’ – which we have used in partnership with a number of motor insurer clients this year. It gives them an easy and highly cost-effective way to tackle fraud and further drive down the cost of claims. We now have a system that completes over 30 different checks, within seconds.”
Preston believes the technology could be a game-changer for the industry, particularly in credit hire claims, which many observers see as a potential growing market for unscrupulous behaviours.
“We know that huge claims savings can be made when insurers take every piece of crucial evidence into account,” continues Preston. “Even simple things such as if a claimant’s car passed an MOT during hire, but that they still continued to hire for another month, can be a strong indicator of fraud. ‘Car Wash’ has, even in cases where the insurer believes nothing else will be found, achieved significant cost savings and, as more claims are withdrawn, the savings will only increase.
“‘Car Wash’ demonstrates Horwich Farrelly’s ability for innovative, sector-defining thinking so we can help insurers build a strong case to defeat fraudulent claims and get successful results. The next step is to add even more data sets to make the system even better.”
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