Sifting Out the Fraud

In the UK, almost one in ten insurance claims is found to be fraudulent, costing the industry £1.6 billion a year and adding an estimated £40 a year to the average insurance premium, according to the Association of British Insurers (ABI).

Malcolm Tarling, of the ABI, says: "Insurers are cracking down on fraudulent claims and it is a crime taken very seriously by us. We know the tell-tale signs - for example, claims made soon after a policy is taken out, or people who claim to have no receipt for an item bought recently. We also have experts who inspect buildings and cars to assess damage - we can tell when damage to a car is metal fatigue, for example, rather than the result of an accident."

All insurance companies also have access to a database called the Claims Underwriting Exchange, which records the status of claims made by policyholders and helps to identify multiple claimants. In an example of how widespread the problem has become, a survey by Moneysupermarket.com, the comparison website, found that two thirds of people would consider lying to their insurer if they had failed to secure their car properly and it was stolen.

Richard Mason, director of insurance at Moneysupermarket.com, says: "You may think that telling a little white lie, or holding back the whole truth, is no cause for concern. But if your claim is as a result of your own wrongdoing, insurers will see it as fraudulent. The consequences of being found out can be dire. Not only could the insurer refuse cover, it could report you to the police."Data-sharing means that other insurers will know that you have made a fraudulent claim, making it very difficult - or impossible - to find cover elsewhere."

So what is the average consumer to do when there is a genuine case of an accident claim?

Through intense research and analysis, insurance companies are now able to "sift out" insurance claims; and to draw example, these insurance companies are usually using the new software Advance- which is a combination of fraud evaluation software from CSC and data sources from Conversant Data- to check claims information to expose potential fraud attempts against its accident claims. Claims are screened according to business rules developed by CSC- for example claims made soon after the policy is taken out may get extra scrutiny. In these cases, whiplash is a much harder claim than is suffering from a broken leg- and thus has more potential for fraud- and in this case, may be subject to more scrutiny.

Whatever, the case may be, in 2008, insurers are indeed cracking down on fraudulent policies; and as the population seeks new and ingenious ways to get more money, accident claims are to suffer a crack-down.