{"id":10239,"date":"2025-11-20T09:29:57","date_gmt":"2025-11-20T09:29:57","guid":{"rendered":"https:\/\/www.advantagego.com\/en-us\/?p=10239"},"modified":"2025-11-20T09:31:34","modified_gmt":"2025-11-20T09:31:34","slug":"can-insurers-win-the-fight-against-fraud","status":"publish","type":"post","link":"https:\/\/www.advantagego.com\/en-us\/content\/can-insurers-win-the-fight-against-fraud\/","title":{"rendered":"The Big Question: Can insurers win the fight against fraud?"},"content":{"rendered":"\n

Fraud has been in the headlines this month as the Association of British Insurers revealed that\u00a0 \u00a31.16\u00a0billion worth of fraudulent\u00a0general\u00a0insurance claims were\u00a0identified\u00a0in 2024.<\/em><\/p>\n\n\n\n

Insurers uncovered over 98,400 fraud-related claims in 2024, a 12% rise from 88,100 in 2023.  It came as insurers said they prevented an estimated 684,800 fraudulent insurance applications, a 7.4% increase from 2023.  The figure came as the industry launched its annual Fraud Awareness Week.<\/em><\/p>\n\n\n\n

Nik Jethwa, detective chief inspector at the City of London Police\u2019s Insurance Fraud Enforcement Department (IFED), warns that the situation was a major concern for law enforcement services and the sector: \u201cRecent convictions and proactive operations, such as our work at Heathrow disrupting luxury watch fraud, demonstrate our commitment to tackling organized insurance crime head-on. With fraudulent claims now exceeding \u00a31 billion, our operational focus remains clear: disrupt, deter, and bring offenders to justice.\u201d <\/em><\/p>\n\n\n\n

Ursula Jallow, director at the Insurance Fraud Bureau (IFB), says: “With the ABI reporting a rise in detected fraud, it\u2019s more important than ever for the insurance industry to stand together in the fight against fraud. Insurance fraud harms society, and the industry recognises its responsibility to protect honest consumers by continually strengthening its prevention and detection strategies.\u201d<\/em><\/p>\n\n\n\n

Earlier this year the ABI\u2019s  annual conference was centred around combatting fraud against a backdrop of a new political climate, changing consumer and social expectations and technological innovation.<\/em><\/p>\n\n\n\n

Organized criminal gangs are increasingly using technology to stage ever more complex insurance frauds. Is the industry capable of meeting the new threats?<\/em><\/p>\n\n\n\n

Lee Williams, Head of AdvantageGo<\/em><\/strong><\/em><\/p>\n\n\n\n

<\/div>\n\n\n\n

Intact\u2019s Head of counter fraud strategy and financial crime, Adele Sumner,<\/strong> says insurers need to undergo a radical review of the way in which they look to combat fraud in an era where technology is becoming an ever more important weapon for the criminals.<\/p>\n\n\n\n

\u201cFor many years the UK has had a data sharing agreement with the United States in an effort to tackle fraud,\u201d she explains. \u201cHowever it is not being utilised. We are not getting the data back which will help us to tackle the threats we face.<\/p>\n\n\n\n

\u201cThe industry needs to ask itself a question. Will we go further when it comes to claims fraud or are we happy to continue to do the same thing we have done for the past 113 years?<\/p>\n\n\n\n

\u201cWe are seeing the fraudsters using artificial intelligence to create new documentation which enables them to carry out ever more complex fraudulent claims and we as an industry are still not asking the questions. More than often we will use AI to potentially flag a fraudulent claim but we need to be going behind the documentation to look at the claim in greater detail.<\/p>\n\n\n\n

\u201cIt is the only way we will be able to tackle the criminality which we face.\u201d<\/p>\n\n\n\n

Sumner, who is also chair of the General Insurance Fraud Committee at the Association of Financial Crime Prevention Professionals, said there are examples wherever you look as to how the current system simply leaves the insurance industry open for misuse and abuse when it comes to claims.<\/p>\n\n\n\n

\u201cI was recently on a trip to the USA and the airline lost my luggage,\u201d she explains. \u201cI then get an email from the airline which was asking me what I had in my suitcase. Immediately it opens the way for me to reel off a Rolex watch, Gucci handbag and high value items without the checks which need to be in place.<\/p>\n\n\n\n

\u201cWe need to speed up what we do and look further and harder at the claims. In commercial and speciality lines insurance data is nowhere where we need it to be.\u201d<\/p>\n\n\n\n

Sumner adds: \u201cTake the example of a container on a large vessel which can carry 10-12,000 TEUs. We get a claim that the container was broken into and the gold bars within the container were stolen during the voyage. The container had been weighed  and the bill of loading states it was carrying gold bars when in fact it was full of bricks.<\/p>\n\n\n\n

\u201cThe insured says the gold was removed mid transit and replaced with bricks. Instead of simply agreeing that was the case have we actually looked at the claim in any detail? Every container placed on a vessel is logged so we can find out exactly where the container was on the vessel. If that container was in the bowels of the vessel surrounded by thousands of others, all tightly packed and stacked there is no way that the container could have been opened and anything removed mid transit. The issue we have is that at present are we asking those types of questions.\u201d<\/p>\n\n\n\n

Sumner continues: \u201cWhile in personal lines we have seen a rise in opportunistic cash for crash fraud, technology is making those cases more sophisticated more complex and with it more expensive and as such it is attracting the interest of criminal organizations.<\/p>\n\n\n\n

\u201cThat sophistication is significantly increasing when it comes to major commercial fraud. We know when the economy is struggling fraud increases.<\/p>\n\n\n\n

\u201cIn the Covid pandemic we saw the creation of fraudulent companies taking out insurance policies to claim for losses and events which simply did not occur.\u201d<\/p>\n\n\n\n

She adds: \u201cThe last three years has seen the use of AI by claims departments to look to identify potential fraud. What we have seen is a rise in false positives which require investigation and only delay payments for honest claims. We have been casting our net too wide.<\/p>\n\n\n\n

\u201cWe need to use intelligence and experience to identify the fraudulent claims. Intelligence needs to be in everything we do.<\/p>\n\n\n\n

\u201cAs such it is very much about the level of type of data we can and do acquire.  We are still collecting the same data as we have done for so long and it is only about 10% of the data we need to fight fraud.\u201d<\/p>\n\n\n\n

Sumner adds it calls for a radical rethink on how we approach claims.<\/p>\n\n\n\n

\u201cThe playbook and the way investigators think has and needs to change,\u201d she explains.  \u201cWe need to change the way we operate. If we simply continue to use the same information, we will restrict our ability to detect fraud.<\/p>\n\n\n\n

\u201cWe are investing in fraud technology before we actually understand the data we need to do the job.<\/p>\n\n\n\n

\u201cFraudsters are getting better at what they do and they are keeping us up at night. We can ask why they do it but the fact is they would not do it if they were not winning.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Fraud has been in the headlines this month as the Association of British Insurers revealed that\u00a0 \u00a31.16\u00a0billion worth of fraudulent\u00a0general\u00a0insurance claims were\u00a0identified\u00a0in 2024. Insurers uncovered over 98,400 fraud-related claims in 2024, a 12% rise from 88,100 in 2023.  It came as insurers said they prevented an estimated 684,800 fraudulent insurance applications, a 7.4% increase from 2023. […]<\/p>\n","protected":false},"author":2,"featured_media":10016,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[7,26],"tags":[10,14],"line-of-business":[20],"class_list":["post-10239","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blogs","category-latest-insights","tag-exposure","tag-underwriting-workbench","line-of-business-property"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts\/10239","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/comments?post=10239"}],"version-history":[{"count":0,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts\/10239\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/media\/10016"}],"wp:attachment":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/media?parent=10239"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/categories?post=10239"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/tags?post=10239"},{"taxonomy":"line-of-business","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/line-of-business?post=10239"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}