how insurers are detecting false claims and tackling fraud

For many years, insurance fraud has been considered a lucrative and popular crime amongst experienced criminals and opportunists alike. Not only do false insurance claims cost insurers money, according to the Association of British Insurers (ABI), fraud adds, on average, £50 to the annual insurance bill for every UK policyholder.

However, it’s becoming increasingly difficult for fraudsters to commit such crimes without being detected by law enforcement and insurers. Let’s take a look at just a few ways insurers are detecting false claims and tackling fraud.

counter-fraud specialists

Under pressure from the government and innocent policyholders, insurers are working hard to crack down on false and exaggerated insurance claims, investing at least £200 million into fraud identification and prevention each year. In 2014 alone, 130,000 fraudulent claims worth £1.32 billion were identified across all insurance products.

Although most insurance claims don’t require extensive investigation, many insurers will have counter-fraud specialists who will carry out inquiries if concerns are raised regarding the legitimacy of a claim. Such investigations can involve anything from social media checks to the assessment of industry databases. A personal interview with the claimant may be required to obtain a comprehensive report and identify any unusual behaviours which may question the validity of a claim.

cctv footage

CCTV is often used by insurers to determine whether a claim being made is legitimate or false.

When a man claimed he was injured in a car park car accident, police checked CCTV to identify exactly what happened. The footage showed that the claimant hadn’t even been in the car at the time of collision.

Claims for injuries such as slips, trips and falls are commonly debunked thanks to CCTV, saving business owners from extensive liability charges and preventing business ruin in the process.

The ABI warns that fraudsters are more likely than ever before to get caught. James Dalton, the ABI’s director of general insurance policy said: “The chances of getting caught have never been greater, and the consequences, such as a prison sentence and difficulty in getting future insurance and other financial products, have never been more severe and long-lasting.”

doctor assessments

Whiplash claims cost the insurance industry millions of pounds each year. Although most claims are believed to be genuine, estimates suggest false whiplash claims cost motorists £2.5bn each year through an increase in motor insurance premiums.

In a bid to reduce the number of false whiplash claims, insurers are increasingly likely to demand that claimants undergo an extensive medical assessment.