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Health check on Fraud Management within Insurance sector
CILA Presentation by Anti-Fraud SIG
John Freeman
30th October 2007
Fraud and the insurance industry Research results January 2001
Professor Alan Doig and Professor Michael Levi
Principle recommendations;
Establish common definitions for fraud measurement Formal protocols with the police Public surveys Requirement and scoping exercise, undertaken across industry databases Create Industry wide fraud resource Information sharing protocols Increase professionalism within the investigation arm of the insurance industry
Common definitions for fraud measurement
Response
ABI definitions agreed and data being reported
Three broad categories:
Fictitious losses, incidents or injuries Staged incidents Material misrepresentation or
exaggeration of losses or personal injury
Returns based on:
Proven insurance fraud Suspected insurance fraud
Formal protocols with the police
Response
ABI/ACPO Memorandums of understanding Version I & II
Improved communication channel
New fraud law will add weight?
Renewed focus but resource issue needs to be tackled?
Public Surveys
ABI Public surveys
Focus Group sessions
Commercial Fraud Survey
Host of Industry Surveys
User requirement and scoping exercise to be undertaken
ABI Polaris project
Objective to develop common standards and common data access protocols
Accessing CUE, MIAFTR,MID etc on one common platform
Streamlined and efficient use of technology to deliver industry data requirements
Create industry-wide fraud resource
Insurance Fraud Bureau
Focus on distributed claims fraud, through which organised criminals make multiple, fraudulent insurance claims across many insurers.
Detica under contract will apply a series of advanced, new data analysis techniques to detect patterns of fraudulent behaviour in huge volumes of claims data supplied to the IFB by UK insurers.
£3.4 Million contract will be run as a managed service, Detica to supply fraud intelligence on an ongoing basis to internal team of insurance fraud case managers.
Agree information sharing protocols
Insurance Fraud Investigators Group – committee role is to:
Manage the circulation of intelligence to IFIG Members
Consider revocation of a firm or individuals membership of IFIG where procedures are breached
National Intelligence Model provides:
Greater consistency of investigation across the UK
Allows more investigators to focus on solving priority problems and targeting the most active offenders thereby reducing exposure
Achieves greater compliance with human rights legislation and the Regulations of Investigation Powers Act (RIPA)
Informs the management of risk
Improves integration with partner agencies
Increase professionalism of investigators
FSA Consumer protectionCompetency
SIA IntegrityProbityCompetency
CILA SIGCharter
Conclusion
Substantial progress since original report in all areas
Need to do more in the market to publicise the fact
Must not become complacent
Challenging times ahead
Danger of compartmentalising strategy
Holistic solution must be the end objective