The growth of organizations over recent years through mergers and acquisitions has left a legacy of siloed data, while the provision of multiple channels to facilitate customer interaction allows fraudsters to more easily exploit and manipulate their identities for criminal purposes, according to consultancy
The firm’s head of U.S. operations, Richard Colven, shared eight fraud trends he predicts will affect insurers in 2011:
1. As the economy remains weak, especially in the areas of unemployment and housing, a continued or even upward trend in certain areas of insurance fraud can be expected. An example would be the increase seen in workers’ compensation claims, which often correlate to an increase in anticipated redundancies.
2. Normally honest policyholders will be tempted to take the opportunistic risk of falsely claiming the loss of phones, computers and other expensive electronic equipment following an actual auto theft or break-in.
3. Organized criminals not previously committing insurance fraud will join in on fraudulent activities based on the potential monetary gains and perceived low risk.
4. Fraudsters will continually find new and more creative ways to commit insurance fraud.
5. The Internet will enable fraudsters to continue to focus on areas where they believe they can gain the greatest amount of money with the least amount of risk. The development of multi-channels provides these criminals with the advantage to manipulate single elements of data through various channels, allowing them to fraudulently exploit a company’s systems.
6. Insurance company data is frequently siloed or disparate due to mergers and acquisitions and other internal activities creating the lack of ability to analyze the entire data network when searching for fraudulent or suspicious activity.
7. Dishonest employees within third-party service companies such as doctors, garages, body shops and contractors, will continue to get involved and support fraudulent activities.
8. Insurance companies will continue to focus on customer service by paying claims quickly, which can leave them vulnerable to organized fraudsters.
“The challenge the insurance industry faces in respect to fraud if taken from the 50,000-foot view can be daunting,” Colven says. “The networks of fraudsters splinter across verticals. Worse, these criminals vary from the opportunistic policyholder who files an inflated auto claim to the sophisticated, shrewd community of fraudsters committing serial attacks on customer’s life policies. Insurers must consider the variables they are up against, as technology and means evolve, so do the methodologies of attack. 2011 is just another year for advancement and increased profits for these criminals unless Insurers develop a strategic resolve to hedge the threat.”
