Combatting Insurance Fraud – How It’s Done

Fraud prevention is an important part of a broker’s business. The Financial Conduct Authority (FCA) requires that brokers like us have systems and controls that prevent and detect financial crime. Failure to have such measures in place can result in the brokers and their staff being identified as committing an offence, even when the involvement is inadvertent.

When the right steps are taken to identify and prevent insurance fraud the the overall risk of a broker is reduced, which can result in better value policies for their clients.

Identification and prevention of fraud can include:

  • Using market data from relevant cases to inform strategies
  • Assessing the experts used by claims firms
  • Independent analysis of a test environment
  • Analysis of any inconsistencies within a claim that may indicate fraudulent activity
  • Use of specialist industry-specific software to identify fraudulent behaviour
  • Use of data-sharing systems to access fraud information at industry level and between insurers
  • Financial screening of business activities
  • Criminal and forensic investigations to rule out or detect foul play

It is wise to remember that insurance fraud doesn’t only apply to claims with big losses – even a small but deliberate untruth is recognised as fraud. This could include:

  • Claiming for possessions that did not exist
  • Exaggerating the value of losses
  • Deliberately destroying an asset to make a claim
  • Supplying misleading information when obtaining insurance

 

If you would like to speak to us about the accuracy of your information, please call 01245 500433, we’ll be happy to answer your questions.