Fighting back against fraudsters
- Insurers detected 130,000 fraudulent claims last year, the equivalent of £3.6 million a day
- Do you have robust systems of inspection and maintenance to defend yourself from fraudsters?
- Find out more about the likely profile of perpetrators and the types of fraud that may be involved, with our guide to fighting fraud
Insurance claims fraud is big business. Last year, insurers uncovered £1.32 billion of fraudulent claims, equivalent to 350 per day. However, an estimated £2.1 billion of fraud still goes undetected each year.
A recent Zurich Municipal webinar on social housing fraud heard that the economic pressures facing the sector could leave registered providers (RPs) of social housing more exposed to fraudsters.
Scott Clayton, UK Claims Fraud Manager for Zurich, explains: “Welfare reforms, diversification and reorganisation in the social housing sector, together with general pressures on resources, all present opportunities for fraudsters to exploit weaknesses in your defences.”
Range of threats
Social housing fraud can take a variety of forms, from bribery and corruption, to false accounting or money laundering. One of the most common is the sub-letting of properties for commercial gain, which according to reports in 2012 was affecting as many as one in five tenancies.
Another common type of fraud is employee fraud. Recent examples include: a Gloucester housing association worker who was jailed for writing himself cheques to the value of £146,000; and a manager of a housing association in Grimsby, who ordered hundreds of iPhones and iPads, supposedly on behalf of his employer, and then sold them for personal gain.
There is one recent trend, however, which is causing particular concern for RPs and their insurers. Clive Speed, Regional Senior Claims Service Manager for Zurich Municipal, explains; “I am seeing more suspected fraudulent claims in the social housing sector, primarily around slips, trips and falls on communal land and estate footpaths.
“Zurich Municipal has very effective counter-fraud capabilities, and manages to identify a large number of offenders. However, the first line of defence against the fraudster is you. If you have robust systems of inspection and maintenance, we can put forward legal defences to claims, whether or not they are fraudulent.
“Conversely, if such systems are not in place, we can only look to defences on causation to stop the fraudsters.”
Motivations for fraud
There are four distinct motivations for fraudsters – need, greed, jealousy and ease. The last of these is too often neglected by organisations.
RPs should be asking themselves: How easy are we making it for fraudsters? What barriers do we put up to prevent fraud? How closely do we scrutinise and validate circumstances? And do we just take people at their word?
At Zurich, we believe that collaboration is key to success when fighting fraud.”
Scott Clayton, UK Claims Fraud Manager, Zurich
Making it easy for fraudsters will ensure they come back for more.
How can Zurich Municipal help?
We can help you review your policies to ensure they are sufficiently robust to defend claims.
Our counter-fraud service goes much further. Key to our approach is putting intelligence at the heart of our investigative strategy. Our team of analysts use information gathered from underwriters, social media and a wide range of other data sources to investigate a claimant’s background and lifestyle, financial history, and any previous claims made.
Collaboration is key
We also work closely with a number of partner agencies and authorities involved in the fight against fraud, including the police, the Insurance Fraud Bureau and the Insurance Fraud Investigations Group.
“At Zurich Municipal, we believe that collaboration is key to success when fighting fraud,” says Scott.
“Detecting and investigating fraud is a people-driven activity. We therefore employ, and work with, some of the best people in the counter-fraud arena, and ensure forums are in place to share ideas, intelligence and practices.”