Interesting research here; It seems that specific postcodes are hit with disproportionate force, in what anti-fraud leaders at Synectics Solutions warn is a growing crisis in motor insurance.
A market-first analysis by Synectics Solutions has revealed locations where motor insurance policyholders are most likely to be ghost broking victims. As a result, fraud experts are urging providers to be vigilant and reevaluate their fraud defences. According to research informed by the UK’s largest syndicated insurance and fincrime database, ghost brokers heavily concentrate efforts on specific types of rural postcodes.
These postcodes typically have smaller populations, fewer registered vehicles, lower claim incidences and cheaper premiums – making them prime targets for fraud like ghost broking.
How Ghost Brokers operate
- Doctoring genuine insurance policies and reselling the fraudulent version: for instance, adding drivers to a genuine policy without the policy holder’s knowledge and then re-selling to the added beneficiaries as legitimate stand-alone policies.
- Creating and selling fake policy documents that appear legitimate: where an no such genuine document/legitimate policy holder ever exists.
Though technically classed as impersonation fraud, with ghost brokers and the policies they issue impersonating legitimate entities, the victims of ghost broking typically have no idea that there is anything fraudulent about their policy until they come to renew or claim.
Breaking down the intelligence analysis
Synectics Solutions SIU found that in the postcodes worst affected by ghost broking, victims account for up to 20% of all motor insurance policies*. This astonishingly high percentage compares to a national average of just 0.2%. To help motor insurers manage their risk and defend customers, Synectics Solutions SIU has made the top twenty postcodes publicly available here.
Chris Hallett, Synectics Solutions’ Head of SIU, is warning that the data points to “ghost broking” being on a concerning upward trajectory. “This impersonation fraud trend is acutely concerning for motor insurers. But equally so for victims, for whom the consequences can be devastating. As part of a continued commitment to protecting customers, I encourage every motor insurer to view the data.”
Learn more about the research and Synectics Solutions’ advice for mitigating risk here.
*Based on total policies issued by insurance companies using National SIRA.