Articles - Closing the net on ghost brokers with email intelligence


As households face the biggest economic squeeze in generations , finding ways to cut the cost of everyday but essential living expenses such as motor insurance will be high on the agenda for many individuals. But it is precisely when consumers are at their most vulnerable that fraud activity increases . Indeed, the crime survey for England and Wales shows a 32% increase in fraud incidents in the year ending June 2021 .

 James Burton, Senior Director of insurance product management for LexisNexis Risk Solutions Insurance, U.K. and Ireland

 With reported losses to ‘ghost brokers’ totalling £1m in 2021, with the average victim losing around £1,950 , it is clear that improving the robustness of front-end fraud detection, to spot potential cases of insurance application fraud must remain a key focus for the insurance market.

 Fortunately, the tools used to help identify ghost broking in the quote process have evolved dramatically and are playing a vital part in spotting potential cases of application fraud before policy inception. Importantly, the fraud prevention tools on offer to insurance providers today deliver robust identity validation at speed, in a frictionless way. This is vital to ensure honest applicants who make up the vast majority, enjoy a seamless customer experience in their digital journey to secure their motor policy.

 So, how have application fraud prevention tools improved? Historically, application fraud has largely been detected based on public and industry shared data alone, often post policy inception. Obviously, these techniques can and have been effective, but manual checks can be labour intensive and time consuming. Also, if not spotted before policy on-boarding they lay bare the risk of a determined fraudster getting through the net.

 In response to the demand for a quick, efficient and automated method of checking identities at the application process, email address validation is now providing a solution to help improve the robustness of identity checks. Already proven as a means of tackling application fraud in the banking sector, email intelligence based solutions are increasingly being adopted by insurance providers who recognise the value an email address can play in tackling this million pound problem.

 Even with the growing use of chat apps and mobile messaging, email remains dominant and is on the rise, with experts predicting nearly 4.6 billion email users by 2025 . The fact that an email address is so heavily tied to a person’s identity and integral to how we function on a day-to-day basis, people rarely change their email address. This makes an email address provided as part of the application process, one of the most enlightening pieces of customer information, for fraud detection.

 The key is the digital footprint that accompanies an individual email address, based on how it has been used online. Every email address is unique, connecting to numerous attributes including IP addresses and domain names. By using billions of transactions from global payment processors and other online industries, email intelligence based fraud prevention tools such as LexisNexis® Emailage® Rapid can provide an instant risk score to indicate whether the ID is genuine or potentially fraudulent. Risk is assessed by evaluating metadata such as whether the email and domain even exist, or whether the email bears close resemblance to the proposer’s name for the policy. Individuals are accurately placed into Fraud Risk Bands and given a predictive risk score based on the applicant’s email address and other supplied information.

 It is clear to see how using email address intelligence, complementing public and shared industry data, can genuinely reassure insurance professionals, who know with a good level of certainty, that an online applicant is who they claim to be. It puts the insurance professional in the driving seat early in the customer journey, helping to identify potentially fraudulent business while protecting innocent people from having their identity compromised.

 For example, Mr Ian Smith applies for a policy but his email address reveals he has previously been linked to fraud. Or Mrs Jane Jones adds a named driver to her policy but the email address bears no relation to her name. In this instance a ghost broker may have stolen Mrs Janes Jones’ ID and added the named driver without Mrs Jane Jones being aware. Email intelligence will flag up applications such as this at quote for deeper investigation.

 As the cost of living rises, cash-strapped motorists will continue to shop around for a better deal and those tempted by a ‘too good to be true’ policy advertised on social media will be at risk from predatory fraudsters. While significant advances have been made in the application fraud battle, the war is not over. We will continue to work tirelessly in developing fraud fighting data solutions to disrupt the criminal activity which threatens the pockets of the consumer and the profits of insurance providers.

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