BGL Group has today announced the successful launch of new and market-leading counter fraud ‘pre-sale’ technology. The substantial investment by BGL has involved the development of another bespoke algorithm which, for the first time, uses artificial intelligence and machine learning to identify criminal activity.
It’s estimated that the average value of a detected motor insurance fraudulent claim is now in excess of £12,000, which significantly impacts on the price a genuine customer will pay for a policy. The new self-educating system, developed in-house by BGL’s data scientists, aims to eradicate fraudulent motor policies ahead of them reaching an insurer’s books.
This technology is the result of years of collaborative research between BGL’s data scientists and the Groups’ dedicated fraud investigation team, and builds on BGL’s existing counter fraud capability which includes preventative measures such as card verification, blocking of discrete information related to known fraud, as well as intelligent ‘point of quote’ and post-sale checks.
The resulting model will be a key control, complementing the work of BGL’s skilled investigators, while having the advantage that it can analyse large volumes of data at speed.
In the last two years, BGL saved more than £1.5 million on marketing costs alone through identifying fake policies. In addition, due to the customer volumes the Group manages across multiple brands, it has been able to remove over 90 per cent of fraudulent policies ahead of an insurer accepting the risk. This latest development aims to improve this even further.
Peter Thompson, BGL Group’s Chief Executive Officer for Insurance, Distribution and Outsourcing, said: “The counter fraud capability we have developed across the Group has already demonstrably reduced our insurers’ loss ratios. With over 10 million customers, the insight we hold allows us to really deliver comprehensive and market-leading insight for our partners. As an industry, we’ve certainly come a long way in how we detect, capture and manage fraud, but so too have the criminals which is why it’s vital to continue investing in counter fraud capability.
“The use of artificial intelligence has the potential to propel the insurance industry into a truly digital arena and its application in areas such as counter-fraud, demonstrates its ability to have a significant and positive impact on both customers and the market as a whole.”