News Review: General Insurance
Insurers are fighting a good fight on fraud
by Kevin Paterson, sales & marketing director, Assurant Intermediary
the association of British insurers estimates undetect- ed general insurance claims fraud totals around £1.9bn a year, adding an average £44 to each policy. at the end of last year
it published its latest in- dustry data on fraudulent insurance claims reveal- ing that insurers detect 335 fraudulent claims every day, totalling some £2.3m. dis- honest home insurance claims are the most common with 170 fraudsters caught out every day. the most common type of insurance fraud is opportunistic where individuals exaggerate or inflate genuine claims to in- crease the value of the pay- out. given the sums involved,
it’s not surprising that fight- ing fraud is high on the in- dustry’s agenda. With premiums rising
fast in some areas the more people realise that this is in part linked to fraud, the less tolerant they are becoming about it. there’s no doubt that some insurers remain coy about referring openly to their counter-fraud
strate-
gies for fear they will be viewed as too harsh in their attitude towards paying claims. But with claims fraud now considered by the insurance Fraud Bureau to have reached a level where it is regarded as a business risk, there appears to be a growing mood of zero toler- ance. insurers have invested significant sums of money and time in training their claims teams to detect and investigate fraudulent activ- ity. they have also deployed specialist technology and other techniques such as voice recognition to sup- port these efforts, and use undercover surveillance op- eratives. the industry as a whole
is also doing more to share information and has created the insurance Fraud investi- gators’ group, as well as en- gaging in other cross-sector fraud initiatives. the work and invest-
ment have created tangible results. ciFaS – the uK’s Fraud Prevention Service – recently released a report that lays bare the fraud re- corded by its members in 2010. the 7% decrease in the overall level of fraud record- ed in 2010 goes some way towards demonstrating the success of preventative mea- sures taken by businesses to foil fraudsters.
MBE Mortgage Business Expo However, ciFaS cautions
us against thinking that the tide has turned. Fraud has still increased by 25% over the past five years and re- ports over recent years dem- onstrate that fraud levels have risen during the reces- sion. inevitably, the uncertain economic climate will con- tinue to have an impact on fraud levels. Fraudulent claims peaked 18 months after the uK officially emerged from the recession of the early 1990s. as spend- ing cuts, tax increases and unemployment levels take their toll, individuals subject to financial pressures are perhaps subject to greater temptation to make false or inflated insurance claims. according to the associa-
tion of British insurers, one in five people would still be tempted to cheat on their insurance. the aBi has also found a significant increase in amateur attempts at fraud indicating that honest cus- tomers are now attempting fraudulent claims. i suspect that despite the
efforts of insurers and their partners, we’re still likely to experience a surge in fraudulent activity across the spectrum of personal lines. However, potential fraudsters should be under no illusion – insurers are no longer a soft touch.
Sponsored by:
To charge or not to charge
That is the question that brokers with a clear eye on the implications of the Retail Distribution Review have been asking themselves. And for those that haven’t, they should be. Whilst RDR has no direct impact on mortgage advisers yet if your practice also gets involved in areas that are covered by the RDR scope then the chances are you may need to comply. Clearly one of the biggest
hurdles that brokers feel they will have to overcome in selling non-investment general insurance is the conversation with clients about charges. Well, there is some good news on that front. Recent research from PricewaterhouseCoopers indicates that the majority of consumers – over 65% in fact – are prepared to pay if they believe they are getting advice from a specialist. Even if you are con- sidering up-skilling your permissions to encompass other areas of expertise that will be covered by the RDR like pension and investment advice, you shouldn’t ignore the fundamental core skill and expertise your business has built up over the years.
19 May 2011, Old Trafford, Manchester
Free to attend! Register today at:
www.mortgagebusinessexpo.com/manchester Quote priority code MIM1
mortgage introducer MAY 2011 15
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60