Sponsored content: Simon Hoskin, director of accident and health at Gallagher Bassett, explores how to combat fraudulent claims via verification processes
In recent years, the insurance industry has become a target and witnessed a worrying increase in fraudulent claims, particularly within travel insurance. This surge has been exacerbated by the emergence of multiple fraud rings and poses a significant challenge as it threatens the integrity of the industry.
Claims management providers can make a substantial impact through enhanced customer validation processes. For instance, the majority of motor and property insurance policies utilise soft credit checks to confirm identity – a practice that should be extended to travel insurance.
This is crucial when policies are purchased via aggregator sites, which have become hotspots for fraudulent activities.
By implementing rigorous identity verification measures, we can significantly reduce the incidence of fraudulent policies and protect genuine customers. If implementing soft checks is not viable, we may wish to ask for copies of a form of ID to ensure authenticity.
Enhanced technology
Recently, the accident and health team at Gallagher Bassett UK observed a trend involving fraud rings exploiting aggregator sites.
Multiple policies were being purchased under different names, followed by a flurry of claims submitted across the industry. Fraudsters are adept at amending documents to suit claim circumstances, making their detection challenging without industry-wide collaboration.
Technological advancements have introduced both opportunities and challenges. While AI has revolutionised many aspects, it has also enabled fraudsters to easily create convincing fake images and documents. To counteract this, the insurance industry must leverage enhanced technology for document validation.
At Gallagher Bassett, we are utilising sophisticated document scanning software to analyse metadata, detect document alterations and scour the internet for similar fraudulent documents. This has already prevented multiple fraudulent attempts and is supporting the protection of underwriters’ loss ratios.
Collaborative effort
Insurers and third-party administrators (TPAs) must work closely together to share intelligence and develop unified strategies to mitigate the impact of fraudulent claims.
A key step towards this direction is the establishment of a database akin to the Claims and Underwriting Exchange (CUE), which has proven effective in other lines of business. Although funding has been a hurdle, the return on investment from such a database would far outweigh the current losses due to fraud leakage. The travel insurance industry should also consider building a dedicated committee for sharing intel solely focused on fraud.
Additionally, we must encourage the formation of dedicated fraud handler teams, rather than relying on claims handler-led solutions. Fraudsters are employing increasingly sophisticated tools and it is crucial that our fraud agents are equipped with advanced resources.
At Gallagher Bassett, we have formed a dedicated team to focus solely on combating fraud. Not only does this help protect underwriters from false or exaggerated claims, but it also enables us to complete internal reviews, highlighting trends and sharing information with our clients on how they can reduce the impact on them.
Finally, collaboration with the Insurance Fraud Enforcement Department (Ifed) is essential. By sharing intelligence and working together, we can bring fraudsters to justice and reinforce the integrity of our industry.
Tackling the rise in fraudulent claims requires a concerted effort from all parties. By enhancing customer validation, leveraging technology, fostering collaboration and empowering dedicated fraud teams, we are able to combat this challenge and protect the client interests.
