The future of fraud detection:
optimising analytics across the policy lifecycle
Article featuring LV= General Insurance, esure and Shift Technology
Fraud thrives in times of flux and uncertainty. It came as no surprise, then, that the first year of the pandemic saw fraud levels surge 33 per cent, with victims facing losses of at least £2.3 billion – numbers that experts at consumer rights group Which? believe are “just the tip of the iceberg”.
The insurance industry was among those targeted by fraudsters. And this at a time when workplace accommodations for Covid-19, such as the rise of remote working, fewer in-person inspections and increased workloads, have created conditions ripe for potential oversight.
“Economic uncertainty will bring more policyholders to either exaggerate the consequences of a real loss or even fake a loss to get an undue reimbursement”
Jeff Manricks, Shift Technology
Insurance experts agree that the pandemic and its related economic hardships will continue to encourage opportunistic fraud. “When times are tough economically, financial struggle can bring individuals and companies to act in a desperate manner,” notes Jeff Manricks at Shift Technology, adding that struggling policyholders may be tempted to “optimise” their costs by filing fraudulent claims. He notes that the past two years have seen an increased frequency of fire and flood claims in commercial buildings and opportunistic building/contents claims in personal lines. “We anticipate that the economic uncertainty will bring more and more policyholders to either exaggerate the consequences of a real loss or even fake a loss to get an undue reimbursement,” he says.
“With the Civil Liability Act, FCA GIPP, Payment Services Directive 2, and the economic impact of Covid, there are more factors that could influence insurance fraud trends now than at any previous time in my career.”
Matt Gilham, esure
Matt Gilham, Head of Financial Crime at esure, agrees. “Whenever there are economic pressures, there’s an increase in fraud of all types,” he says. “But in the insurance sector itself, it’s difficult to make assumptions about how this will play out because there are so many different moving parts. With the Civil Liability Act, FCA GIPP, Payment Services Directive 2, and the economic impact of Covid, there are more factors that could influence insurance fraud trends now than at any previous time in my career.”
Meanwhile, the increased uptake of digital channels during the pandemic can be seen as a double-edged sword. While it has created new opportunities for fraudsters to take advantage of digital newbies, Matt Gilham, esure, points out that “digital allows insurers to leverage more data at every touchpoint which leads to a better view of the customer and, ultimately, sharper fraud detection”.
“Fraudsters always look for the weakest link”
Matthew Crabtree, LV= General Insurance
Matthew Crabtree, LV= General Insurance agrees: “With our digital channels, we have a lot more insight into the customer, their device and their online journey, and that gives us a better understanding of their behaviour and risk profile than a more anonymous customer who calls us over the phone. Fraudsters always look for the weakest link, which is why, in the fight against fraud, we cannot leave the call centres behind.”
Matt Gilham, esure, adds, “Technology also enables insurers to efficiently leverage high volumes of data, both structured and unstructured, which allows smart algorithms and experienced fraud agents to work more quickly and effectively”. The result? An improvement in both customer experience and fraud detection rates – without ramping up costs.
“By organising data in a coherent manner, ‘cleaning’ it to further analyse, enriching it with relevant external information and implementing cutting-edge detection algorithms, the shift to digital allows insurers to take advantage of what machines can do in real-time collaboratively with humans to make fraud investigation more efficient,” says Jeff Manricks at Shift Technology. “The fraud alerts are more relevant, more diverse and easier to deal with, hence economically more efficient.”
Head of Financial Crime Strategy, LV= General Insurance
Matt is a financial crime expert who joined the insurance industry in 1997 and has spent more than 17 years fighting fraud. After joining LV= General Insurance in 2010, he’s now the Head of Financial Crime Strategy.
As well as managing all LV GI’s organised fraud across both policy and claims channels, heading up the Special Investigations Team who investigate criminality involving employees and the LVGI supply chain, Matt is responsible for working closely with the business to ensure that financial crime risks and minimum standards are appropriately recorded and assessed. This includes identifying emerging financial crime threats and ensuring LV GI have appropriate controls in place to mitigate exposure as well as identifying opportunities for value-add strategic and tactical financial crime solutions.
Head of Counter Fraud & Financial Crime, esure
Matt Gilham is Head of Fraud and Financial Crime at esure, with over 30 years’ experience in fraud prevention, detection and investigation. He’s passionate about combining an unbeatable technology platform, with advanced use of data and skilled teams to both defeat fraud while supporting the customer experience.
Director EMEA North, Shift Technology
Jeff Manricks is Director of Sales at Shift Technology, with over 20 years of experience working with insurers to drive innovation and efficiencies. Jeff’s belief is that Artificial Intelligence has the potential to unlock the future of insurance decisions, whether it is solving business-critical issues in automation or fraud detection or empowering insurers to deliver amazing customer experiences
About Shift Technology
Shift Technology delivers the only AI-native fraud detection and claims automation solutions built specifically for the global insurance industry. Our SaaS solutions identify individual and network fraud with double the accuracy of competing offerings, and provide contextual guidance to help insurers achieve faster, more accurate claim resolutions. Shift has analyzed hundreds of millions of claims to date and was presented Frost & Sullivan’s 2020 Global Claims Solutions for Insurance Market Leadership Award.
For more information please visit www.shift-technology.com.