Application Fraud is On The Rise

Then latest stats from the ABI show that application data being submitted is not always accurate, plus comment from LexisNexis Risk Solutions below;

The ABI has reported a 7.4% rise in application fraud in the UK, as overall fraud figures jump 2% to £1.16bn.

Dan Cicchetti, associate vice president of client engagement, U.K.&I insurance, LexisNexis Risk Solutions, says:

“Fraud remains a persistent concern for insurance providers, particularly as economic pressures fuel both opportunistic and organised claims. Application fraud, in particular, is rising fast, with more than 680,000 cases stopped last year. This is against a backdrop of elevated shopping and switching activity as we have seen in motor.

“The challenge for insurance providers is to stop fraudsters at the front door without creating delay or friction for honest customers. This is where automated no claims discount validation, identity validation, email intelligence and named driver checks make a real difference. Email risk scores and focusing as much attention on named driver risk as that of the proposer are already helping to spot ghost brokers and other fraud risks at point of quote or policy inception.

“In our recent tests, one in every hundred applications carried a strong fraud marker, and with over 300 million transactions screened a day, these enrichment tools give insurers a streamlined way to flag risk, focus investigations, and sharpen pricing.

“Motor insurance fraud can’t be solved with a single approach – but by combining ID validation, email intelligence and cross-market insights, insurance providers can build stronger defences while keeping the customer journey as seamless as possible.”