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The war on insurance fraud demands cross-border, cross-sector collaboration if it 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
 
Thursday 27 May
Read time: 3 mins
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 we held our Global Insurance Fraud Summit in November 2020, which had 150 attendees from 28 countries ranging from police, tax and border authorities to insurers, trade bodies and systems experts.

Of course, it’s impossible not to mention the influence of the pandemic on insurance fraud, however its impact hasn’t been all bad.
 
 

Global co-operation to tackle a global problem


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.

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

Disrupting fraudsters


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 disrupt criminal operations in the first place.
 
It’s worth taking a look at some of those defences around the world:
  • Overall, 78 per cent of insurance companies now have fraud hotlines, compared with 64 per cent across all industries. These hotlines are a crucial weapon in the battle against fraud, with tip-offs helping to detect 50 per cent 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 systems which enable 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. 
 
The war on insurance fraud demands cross-border, cross-sector collaboration and a real willingness to share information if it 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. 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.
 

About the author
Robert Harris is Insurance Fraud Global Product Manager at BAE Systems Applied Intelligence
robert.harris5@baesystems.com

 

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