Insurance Fraud is A Global Problem

The war on insurance fraud demands cross-border, cross-sector collaboration and a real willingness to share information if is to stand any chance of tackling the problem. The bad news for the criminals is that this collaboration is already happening on a global scale, says Robert Harris, Insurance Fraud Global Product Manager for BAE Systems.

It feels like almost every day someone dreams up a new way of defrauding the insurance industry. Every new security system is seen by criminals as a direct challenge to find a way of beating it and extracting the valuable data they need to steal identities and ultimately money.

Different countries may see a prevalence of different types of fraud, but there are no geographical boundaries to this kind of crime, and fighting it is increasingly an international team effort.

Just how fast that international effort is moving was very evident when BAE Systems held its Global Insurance Fraud Summit in November, which had 150 attendees from 28 countries – compared with 50 people from 16 countries the year before. Businesses and organisations ranging from police, tax and border authorities to insurers, trade bodies and systems experts were all represented.

We also have the Intelligence Network, a global community of more than 2000 cyber and financial crime professionals and industry influencers with representatives from companies and organisations including Microsoft and the CBI. They share information, carry out research to drive and inform new initiatives, and lobby for change, in order to strengthen everyone’s defences against cyber crime.

Of course it’s impossible not to mention the influence on all this of the pandemic in the past 12 months, however its impact hasn’t been all bad.

Yes, Covid has driven certain types of fraud and provided lots of opportunity for new scams – but it’s also driven some great co-operation across different sectors. It’s encouraged a far greater willingness to share information and experience across organisations and geographical boundaries, which is really paying dividends.

For example, lockdown inspired the Coalition Against Insurance Fraud to have its first ever webinar. It which turned out to be the largest ever anti-fraud gathering, attracting 3000 attendees – now that kind of event has become a way of life.

Partnerships between the public and private sectors are especially important in fight against vehicle crime. Data sharing between all the organisations and authorities involved in the life cycle of a car and the investigation and prosecution of fraud, including the car manufacturers, insurers, leasing companies, lawyers, is crucial – and it’s happening now in a way that has sometimes been resisted in the past.

Because of funding challenges, disrupting fraudsters’ operations is as important as prosecuting them. There isn’t always the resource, especially in some countries and regions, to investigate and/or prosecute a lot of active fraud, and this financial challenge has sparked some real creativity in finding ways of making it difficult for the criminals to operate in the first place.

It’s worth taking a look at some of those defences around the world:

· Overall, 78% of insurance companies now have fraud hotlines compared with 64% across all industries – these hotlines are a crucial weapon in the battle against fraud, with tip-offs helping to detect 50% of cases, so insurers are ahead of the pack

· In Hong Kong there’s a significant problem with fake cover notes, which are supplied by fraudsters to unsuspecting vehicle owners who then drive around unaware that they have no insurance cover. They are making inroads into the problem thanks to the introduction of new system which enables an immediate documents check, as well as having sophisticated fraud analytics which detect signs of criminal activity.

· In South Korea, recent regulatory change has played a big part in fighting fraud. Until August 2020 it wasn’t possible for investigators to access information crucial to detection and prosecution, but that has now changed, allowing investigators to get the data they need.

· In Singapore, the General Insurance Association offers a public reward of up to 10,000 Singapore dollars (around £5600) for information leading to the conviction of insurance fraudsters.

Around the world, anti-fraud teams are rising to the challenge, tackling the issue with creativity, optimum use of all available intelligence, and ensuring people are trained so they know what to look for and how to tackle it.

That kind of determined effort will ensure that we keep one step ahead of the fraudsters who seek to damage companies and cause huge stress and anxiety to their customers.

This article was produced in association with BAE Systems
About alastair walker 11372 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

Be the first to comment

Leave a Reply Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.