What is Ghost Broking and Ghost Insurance Policy?

Ghost Brokers sell fake or defrauded insurance policies to individuals for what appears to be very cheap premiums. Unfortunately, these policies are not worth the electronic mail they’re written on.

This can work in two ways, either the ghost insurance policy is incepted using falsified or stolen identity data and sold onto unwitting customers, or fake policy documents are produced to impersonate a legitimate insurer. We’re going to focus on how the former is evolving and how you can combat it.

Rise of Ghost Brokers and Ghost Insurance Policies

In our last editorial, we wrote about the rise in reported True Identity Theft, Account Takeover and reported 3rd Party Application Fraud by our insurance clients, all fraud instances that are prevalent in Ghost Broking insurance policy operations. The threat from Ghost Brokers is not a new one, but the techniques they use to avoid detection are constantly evolving.

Ghost Insurance Policy Detection

Fraudsters know they are being watched, we see this when investigating the origin of questionable policies. Fraudsters have started to create smaller amounts of falsified accounts per combination of deception. They will actively change not only an identity but also the device in use to avoid detection. They are able to change the device profile (is it a laptop? tablet? mobile phone?), the location (are they based in the UK or further afield?), the MAC address, the local language, operating system, screen resolution, and this is just scratching the surface.

Fraudsters have hundreds of variables to play with to enable their behavior, so how is the insurance industry keeping up?

Ghost Insurance Policy Prevention

Firstly, there are offerings on the market that can aid you to recognize these signs and help to combat fraud (disclaimer: iovation is one of them!). Secondly, insurers can collaborate by sharing fraud insights with other insurers, or even other industries to get a better picture of evolving threats. This is a powerful tool that allows insurers to connect the dots on ghost brokering fraud rings before running afoul of them. Because after all, insurance is not the only defrauded industry, and these sophisticated fraud techniques are being used and perfected elsewhere.

Recognition and collaboration are the biggest weapons in fighting fraud because businesses cannot solve such large issues in isolation. With these tools, you can evolve your fraud prevention, and help ensure that your policies ARE worth the electronic mail they’re written on.