Comment from Martyn Kyle, Head of Insurance, SAS UK & Ireland following the release of The Annual Fraud Indicator 2012 by the National Fraud Authority
“The importance of these findings for insurance companies is that whatever fraud prevention measures existed yesterday, more strengthening is still required. In practice, many insurers have succeeded in deploying some fraud measures within different lines of business. Usually, the target is large fraud arising from organised criminal activity. Fraud however does not exist in a monoculture.
“The attitude of insurance companies needs to be - "throw everything at it, plus the kitchen sink”. A more enterprise approach to fraud management is required. By this I mean the deployment of a consistent fraud management framework made up of people, technology and process. Necessarily, this "framework" needs the support of an enterprise-class fraud management technology, that has the competency and insurance intellectual property to use the full gamut of analytical capability deployed against internal and external data (including social media and unstructured data).
“This "framework" is clearly not a "once and done" deployment but exists in a permanent state of continual improvement and will therefore needs to have an inbuilt means to continually measure itself for effectiveness. Recently, we have already seen some criminal activity shift from "cash for crash" fraud to "ghost broking". So it is important that the same "framework" can be applied to stop fraud at the door as well as manage that which arrives through the claims process.
“When insurers uplift their fraud management competency to this level, we will see these fraud numbers driven down”
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