Insurers in the UK and beyond are rapidly expanding self-service, 24-hour access to their online and mobile services.
Popular aggregator sites have fueled the trend, letting consumers quickly and efficiently obtain quotes from multiple companies in one request. While a great service for consumers, it’s also an excellent opportunity for fraudsters who manipulate data to obtain less expensive insurance. Sometimes this is for their personal use, but often―and much more worrisome―this is on behalf of others, as in the case of ghost brokers. To shed some light on the magnitude of the problem, in 2013 the Association of British Insurers reported that the UK spent £230 Million to fight insurance fraud, with known fraud attempts equaling £1.3 Billion.
In order to stop fraud before it happens, insurers should consider leveraging the knowledge of their peers. One way to do this is through a shared device intelligence network. At iovation, a consortium of industry professionals place records of confirmed fraud on an account or device that can be viewed by other users. This evidence provides insight into the type of fraud committed, which company or industry saw the fraud, when it happened, and all of the associated accounts and devices. This shared knowledge is also extremely valuable in uncovering groups of seemingly unrelated individuals in order to stop fraud rings.
It’s also very useful to understand the type of fraud previously reported. A simple blacklist doesn’t provide enough detail. Insurance analysts need precise fraud reporting that can identify whether fraud was specifically insurance-related, such as first or third-party application or claims fraud, or whether another type of fraud such as identity theft or credit card fraud was reported. This type of rich data allows insurance companies to identify known fraudsters, patterns and anomalies, making informed decisions when deciding whether or not to do business with an end user. Once a quote is made, the power of a consortium can continue to protect insurers at policy inception, claim and renewal.
iovation works with 150 fraud analysts in the UK insurance industry to stop fraud at every stage of the policy life cycle. The consortium is just one way to leverage the power of community to stop cybercrime—the other is iovation’s Fraud Force Community. Open to iovation subscribers, this private online group is a place where analysts can collaborate, share best practices and learn from each other. iovation also hosts quarterly in-person user group meetings for insurance fraud analysts. The next meeting will take place in the UK on April 29, 2015 and will cover recent trends, hot devices, evidence overlap and top business rules. Attendees can strategize to prevent ghost brokering, policy violations and claims fraud, and share experiences around suspicious geolocations and ISPs. For more information on this event and the Fraud Force Community, email: email@example.com.