Articles - Connected and Contributory Data Key to Fighting Fraud

 

Within the insurance sector where insurance fraud can occur at any point in the customer journey, from application and quote through to claim, the focus is on taking exactly this kind of multi-layered approach to detect risk earlier and support genuine customers.

 

The first step is to leverage the customer data an insurer provider already has within its own organisation. Most insurance providers possess significant amounts of information about their customers, but much of it sits across multiple systems that were never designed to work together.

 

Customer records are often spread across underwriting, pricing and claims environments. Legacy platforms, acquisitions and siloed processes can create fragmented views of customer behaviour. As a result, critical connections can be missed.

 

For example, a customer with a history of repudiated claims may appear to be a completely new applicant. Inconsistencies between previous applications and current claims may never be identified. The warning signs of potential insurance fraud may exist, but they remain hidden because the underlying customer data is disconnected.

 

This is where connected data and real-time intelligence become critical. Identity resolution technology can link fragmented customer records across multiple systems to create a single, trusted view of an individual. At quote or claim, insurance providers can gain a richer understanding of customer behaviour and potential fraud risk indicators, while helping deliver a better experience and outcome for genuine customers.

 

Email intelligence provides an additional way to assess fraud risk, during the quote or application process with minimal customer friction.  This includes ghost broking, where fraudsters pose as legitimate intermediaries to sell fake or manipulated insurance policies to unsuspecting consumers, or they steal identity details to commit fraud without the consumer knowing they’ve been used.

 

Once considered a relatively niche insurance crime, ghost broking has evolved into a highly organised form of insurance fraud. Criminals use social media, messaging apps and online marketplaces to reach thousands of potential victims, particularly younger consumers searching for affordable motor insurance cover. Recent warnings from the FCA highlight how social media has become a primary channel for ghost brokers targeting young drivers[ii].

 

Email intelligence is built on billions of transactions across payment ecosystems and other online industries to give insurance providers an instant risk score that helps verify an individual’s identity through email address information. The score can indicate whether the identity used for the insurance application may be fraudulent, possibly been created to secure insurance to sell on or to make a fraudulent claim. This provides a flag for additional checks to help protect customers, insurers and the wider market.  

 

Additional metapoints provide confidence such as whether the email address and domain even exist, when the email address was first seen, or whether the email address bears a close resemblance to the proposer’s name for the policy offer further insight on the risk. The value is enabling insurers to review digital identities with little or no history, tumbled information or reported fraud attempts across multiple industries.

 

Contributory databases and shared intelligence platforms enable insurers to identify patterns that no single insurance provider can see alone. The more quality data contributed by participants, the greater the collective benefit. Duplicate insurance policies, connected claimants and suspicious activity spanning multiple products become easier to identify when data is shared effectively across the market and made available from quote through claim. That is the principle behind LexisNexis® Risk Solutions contributory databases, which comprise policy history data and cross market claims history data.

 

In these ways and more, the insurance sector's response to fraud reflects the direction set out in both the U.K. government's Fraud Strategy and U.K. Finance's latest findings. Better data sharing. Greater collaboration. Earlier intervention.

 

The U.K. Finance report makes one thing clear: fraud is no longer a challenge that any organisation can tackle alone. Criminals operate across sectors, channels and borders. Their use of technology allows them to scale faster than ever before.

 

Ghost broking illustrates this perfectly. A fraudster operating overseas can use global social platforms to reach U.K. consumers instantly, creating victims, claims and financial losses across multiple organisations.

 

To keep pace, insurers need the same ability to connect the dots across customer identity, policy and claims data.

 

The future of insurance fraud prevention will depend on the insurance industry's ability to connect information, share intelligence and identify risk before losses occur. Organisations that succeed will not only reduce fraud losses but also improve outcomes for genuine customers through faster decisions, reduced friction and greater trust in the insurance process.