Inspector Clouseau
‘There was a beump!’
The great Parisian detective is certainly no stranger to collisions, both real and faked, and would be well-placed to look at the increase in car insurance fraud – something which is almost becoming an industry in its own right. Just in October, Cumbria police uncovered a ‘cash-for-crash’ organisation that was worth nearly £500,000. The leader of the fraud ring made repeated claims for fantasy accidents in cars that had their clocks wiped clean of thousands of miles to inflate their values. But it’s not just fake accidents with ‘mutton dressed as lamb’ cars, there are also tactics such as suddenly slamming on the brakes to make another driver hit the back of the vehicle in front – one of the most common accidents on the roads. With the naked eye it’s hard to prove that it wasn’t simply an accident – even the famous French detective has fallen down the stairs now and again.
Lieutenant Columbo
‘Just one more thing’
In fact, car insurance fraud has grown to the level where it’s estimated that fraudulent claims raise the insurance premiums of every UK motorist by an average of £50 per year. Insurers actually foiled 70,000 dishonest claims in 2015, with a value of around £800 million – and these are just the ones that were stopped. It’s hard to blame insurance companies for putting their premiums up to protect themselves against this seeming ‘epidemic’. This is doubly true when you consider that 73% of the UK population themselves believe that ‘cash-for-crash’ schemes are a big problem in the UK. Another 70% of drivers are worried about sustaining injuries in a deliberately-caused accident. Yet, we still don’t like it when insurance premiums go up year after year. There’s no lack of statistics and connections, but even Columbo, with his love of numbers, might struggle to find the frauds.
Sherlock Holmes
‘A three (tail)pipe problem’
As insurance claims actually account for a huge 80% of insurance companies’ costs, we definitely need to carefully consider all the angles of an accident. There’ll likely be no lack of physical evidence for the leader of the Baker Street Irregulars to examine with his famous magnifying glass. Forensic evidence plays a crucial role in deciding whether a claim is fraudulent or not. However, evidence can be manipulated and it’s difficult to detect more subtle frauds – how could Holmes tell how sharply the car in front applied the brakes, especially if they weren’t moving fast enough to leave tyre marks?
CSI: Telematics
‘Evidence never lies’
Technology in the form of telematics can fill in the gaps where Mr. Holmes couldn’t. The Department for Transport reported 162,340 people lightly injured on the roads in 2015 and 61 per day seriously injured. Sifting through all this data would be an almost impossible task without the proper technology and this is why insurance companies are forced to simply add that £50 to each insurance policy – they just don’t have the wherewithal to sift through every single claim and separate the fraudulent claims from the genuine ones. However, by using telematics we can build up a picture of actually happened at an accident scene. This happens through examining the telematics data and understanding exactly what each vehicle was doing in the moments before, during and even after a crash. We can understand if there was unusual behaviour that would be consistent with someone deliberately engineering an incident.
But being able to understand what happened in one isolated accident is not going reduce premiums for all drivers. There needs to be an understanding of the bigger picture. By using the telematics for each individual accident and then storing this in a wider database, insurers and telematics providers can realise the real scope of the problem. With accurate data on the real amount of fraudulent claims and the cost per claim on the UK’s roads, it is possible to price premiums accordingly, rather than simply applying a blanket cost increase to everyone’s insurance policies. It’s also possible to cross-reference data. For example, investigators can search for similar types of accident and the resulting injuries and damage to vehicles. If there are two accidents with identical characteristics but widely differing consequences, this could raise suspicions that one isn’t what it seems on the surface. This is the same as when a detective looks through his or her old casefiles to try and gain insights on the case they’re working on at that moment. We can even understand which areas of the country or types of vehicles and drivers are most at risk and price this accordingly.
Every detective throughout history has relied on having the most accurate information. For Clouseau, Columbo and Holmes, they had to gather it themselves and then connect the dots. Modern-day Crime Scene Investigators use sophisticated technology to break down the data they gather. The insurance industry should be no different. By using telematics systems to understand exactly what happened at each crash—real or fake—and then place that into a wider context the industry can come together to understand exactly how fraudsters operate and be one step ahead of them.
We may not be able to totally eliminate fraud, but we can at least ensure that the effects of ‘crash for cash’ schemes are not felt by every driver on the road and that everyone’s insurance premiums are priced according to their behaviour, rather than someone else’s.
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