Anti-Fraud Strategy: Sedgwick Estimates Client Savings at £49m

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Sedgwick, a leading global provider of claims management, loss adjusting and technology-enabled business solutions, has reported that efforts tied to the company’s international claims fraud strategy saved its clients £49.4m in 2023.

The first quarter of 2023 saw continued double-digit inflation, which placed added financial pressure on motorists, homeowners and businesses alike, and contributed to an 8% increase in claims identified as suspect across Sedgwick’s UK book of business. Further, the average cost of investigated claims increased in 2023 — an uplift driven not only by inflation, but also by a spike in fraudulently exaggerated, high-value escape of water claims made during the UK’s winter freeze event in 2022.

“Over the past three years, the value of savings delivered to our UK clients has grown by 73%,” said Ian Carman, Director of Sedgwick’s UK fraud and investigation services operation. “This is testament to our unrelenting effort to identify dishonest claims, which in turn protects our clients and their honest customers from the cost of fraud.”

REGULATOR DEMAND

Steve Crystal, Head of Sedgwick’s international fraud and investigation services, noted that regulators are taking greater interest in fraud and abuse oversight, and global markets are, in turn, focussing more on financial stewardship.

“We’re seeing a growing appetite for mitigating the threat of fraud internationally,” Crystal said. “At Sedgwick, our emphasis remains on strengthening our capabilities with cross-border activity across all product lines. Whether insurers have a global presence or operate solely in local markets, the common denominator is that claims fraud is increasingly viewed as bad news.”

Amid shifting economic and regulatory conditions, Sedgwick’s experts have observed a recent increase in organised fraud rings, which continue to adapt how they target financial services. For example, many are taking inappropriate advantage of the rising popularity of transactional, embedded (no additional charge) insurance benefits, such as travel, medical and purchase protection offerings, by operating across multiple geographies.

“Fraud doesn’t sit neatly within borders,” Crystal said. “We encourage markets to explore collaborative opportunities for sharing their findings while maintaining appropriate levels of local protection and compliance.” 

Later this year, Sedgwick in the UK will further enhance its offering with the launch of an innovative suite of technology solutions expected to transform claims fraud risk identification.

“We’re pleased to continue strengthening our fraud strategy internationally and providing proportionate and ethical investigation services around the world,” Crystal said. “This lies at the heart of how Sedgwick helps clients protect their valuable assets and the majority of their customers who make genuine claims.”