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EDITORIAL BOARD

A crystal ball for fraud raud has been a persistent and growing issue for the insurance industry since 2008. Although ghost brokers and organised fraud rings make the headlines and cost the industry millions, Experian analysis showed the majority of insurance fraud is carried out by non-professional fraudsters, with 90% of fraud in financial services committed by first-party fraudsters.

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As more than a third of converted policies have at least one potential indicator of application fraud, the net result is that, just for motor insurance quotes in the broker channel, the industry looses a potential £1.42 billion in premiums. That’s before you take into account the increased propensity of these customers to make a claim – the costs of which could be as high as £1.36 billion. According to the Insurance Fraud Survey 2015, only 22% of insurers feel they are dealing with application fraud successfully. Consequently, insurers that take action now to protect themselves against such behaviour can focus on their quality clients, leaving the laggards to quote more competitively for, and hence win, the problem customers whose business they really don’t want to write. The key lies in using technology to capture and monitor the behaviour of individual customers in real-time across the whole insurance market to identify when application fraud is occurring. Insurers can then decide whether to push ahead with a quote if the manipulation is not too severe, refer it to a broker to verify details or decline altogether for the 2% or 3% of customers that cause the worst losses. This is exactly the level of insight provided by solutions such as SSP Verify, enabling insurers to identify and respond to the actions of dishonest individuals. Proven ghost brokers, fraud rings and suspect devices can also be added to watch lists to flag up any activity. As consumers respond to a hardening market and the Insurance Premium Tax rise, it is likely they will carry out greater levels of manipulation and become more sophisticated in the way they do this. Our insight into customer behaviour showed the details that are much harder for insurers to verify already coming to the fore –and this trend is only set to intensify. May 2014

February 2015

1

Vehicle kept overnight location

1

Vehicle usage

2

NCD

2

Occupation

3

Mileage

3

Mileage

4

Occupation

4

Vehicle kept overnight location

5=

Claims

5

NCD

5=

Convictions

While there are no shared databases for the validation of vehicle usage, counter-fraud technology tackles this evolving behaviour head on, providing a significant competitive advantage for early adopters.

Rejecting junk science reduces claim costs, liability and time lines ne of the most significant costs and potential liability of flood claims is the contamination that develops post water damage. The significance of contamination is relayed in British Standards and enshrined in H&S as a requirement, to verify the remediated property is in a safe condition for occupation and not least the statement that a property has been returned to a pre loss condition.

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The contamination arises from black or clean water, which causes bio amplification of the omnipresent mould spore and bacteria. This amplification occurs as ideal environmental growth conditions occur as the building warms up during the drying process, and contaminated surface dust and biological growth, dry and becomes aerosolised dust. Of course claims managers will expect to see line costs for decontamination, but just how cost effective are the current protocols used and more importantly do they work? Currently, contamination is sprayed or fogged with chemicals in an effort to kill it, however the World Health Organisation (WHO) state that inhalation hazards are the major risks to building occupants and most importantly warn that dead or non-viable mould, bacteria and cell wall components are allergenic and pose a much higher risk than live or viable components. The current use of fogging and disinfectants by the flood restoration industry does nothing to remove the known hazards and few (if any) contractors comply with British Standards and verify sanitation, relying on the unfounded “returned to pre loss condition” as the only guarantee. Manufacturer’s sales talk ignores the point that all sanitising agents require source removal, or cleaning to remove the contamination prior to application and contact dwell times usually means submersion or contact for 20 minutes, something that never ever occurs outside a lab. The HSE have published data that proves conventional air cleaning techniques of HEPA air filtration doesn’t work, so the claim manager should wonder just what they are paying for and what actual results are being achieved for the money spent. A new low cost method of decontamination and cleaning called “Airscrub” cleans the air by causing contamination to drop out of the air in minutes, meaning properties can be decontaminated within a few hours. Jeff Charlton, Technical Director, Building Forensics Ltd. Training and information is available from Building Forensics on 08700 789 999 jeff@buildingforensics.co.uk

Ron Atkinson, Head of Insurer Relations, SSP Worldwide.

March 2016

Modern Claims 41

Profile for Charlton Grant

Modern Claims Magazine - Issue 18  

Modern Claims brings you all the latest news from the Claims Industry, with a newer, fresher and more modernised look! Happier reading with...

Modern Claims Magazine - Issue 18  

Modern Claims brings you all the latest news from the Claims Industry, with a newer, fresher and more modernised look! Happier reading with...

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