Insurance
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Looking back on the past 18 months the two fraud cases which
have created most headlines – Summers v Fairclough Homes and Fari v Homes for Haringey - have been Employers' Liability (EL) and Public Liability (PL ) claims respectively, not motor. In 2012 over 50% of insurers reported an increase in fraud in those
areas. In May last year Allianz fraud manager Mihir Pandya expressed concern that gangs engaged in “crash for cash” scams were moving into the EL field, with several investigations underway involving fraud rings centred on factories and warehouses. He reported that companies in financial difficulties are at
particular risk of scams, with vulnerable workers encouraged to make bogus slip and trip claims. An increase in EL and PL fraud is of particular concern in view of its high value; whilst the average fraudulent claim is valued at £8,750, this rises to £30,000 for liability claims. The same issue arises in the context of commercial insurance fraud: the incidence of fraud may be relatively low, but the value of each claim is often very high. To prove that no form of insurance is immune from fraud, an
increase in pet insurance fraud was reported for the first time in 2012. The average claim is low, at £391, but with a 300% increase in detected pet fraud reported in ABI research in 2010, and a market
estimated to be worth more than £900m by 2015, current levels of fraud are already a concern.
Combating the fraudsters To combat fraud across all business types it is important that the
lessons that have been learned in tackling motor fraud are put into place in other areas. With all types of fraud there is rarely one remedy: a regime which aims to tackle the problem on several fronts is likely to be more effective. For EL claims the insured will be a major source of assistance with
an investigation to capture witness accounts, independent evidence and details from the claimant, crucial in identifying and tackling fraudulent claims. PL claims present further problems in view of the lack of proximity
between the claimant and the defendant but thorough investigations including the creation of claimant and witness profiles in appropriate cases have brought results. The use of data sharing, geographic data and the interrogation of social media continue to be important tools. Insurers and their representatives must be at least as imaginative
and adaptable as the fraudsters if fraud is to be tackled not only in motor but across the book. ●
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