The Insurance Fraud Bureau (IFB) is to extend its fraud detection into property and liability from 2016. This follows sign-off on strategy plans from the trade body the Association of British Insurers’ General Insurance Council (GIC).
This will also see a cross-industry intelligence sharing system commissioned, which will complement fraud data captured by the Insurance Fraud Register (IFR) to identify suspected fraud in policies and claims.
Ben Fletcher, Director of the IFB, said: “Implementation of the IFB strategy marks a major step-change in the insurance industry’s fight against fraud. We know fraudsters aren’t ‘product loyal’, and having tightened our controls in fighting organised motor fraud, it is essential that we increase attention on other product lines simultaneously, to avoid simply shifting the problem of fraud elsewhere.”
The IFB reports a drop in ‘crash for cash’ fraud, with the value of organised scams reducing by almost £60m in the last three years. That reduction has been attributed to work by the bureau with insurers that pay for the IFB, regulators and law enforcements agencies, including the Insurance Fraud Enforcement Department (IFED).
After a stakeholder consultation in 2014, the IFB’s future strategy (2015-2019) was launched. Developed by the industry, the IFB’s ‘2020 vision’ took in two primary strategic objectives:
– To extend the IFB’s remit beyond organised motor fraud – to detect/disrupt cross-industry, systematic fraud in other product lines;
– To build cross-industry intelligence sharing infrastructure – required to share vital fraud intelligence in an efficient and legally compliant manner.
An industry Project Board (chaired by Allianz Fraud Manager, Mihir Pandya) led scoping work in 2015 to establish the feasibility, timeframe and potential return on investment in delivering the IFB’s strategic vision.
Mihir Pandya said: “The proof of concept work undertaken this year has identified significant untapped value in tackling fraud in other product lines. Liability and property insurance, in particular, appear to be fertile ground in terms of fraud networks targeting the claims process, and it’s a natural evolution of the IFB to extend its detection capabilities into these lines of business.”
The IFB is expected to start issuing intelligence reports and managing cross-industry investigations into property and liability fraud rings by the third quarter of 2016. In addition, preparatory work will begin in 2016 to establish an industry-wide intelligence sharing system, which will complement proven fraud data captured by the Insurance Fraud Register (IFR) for screening policies and claims.
Ben Fletcher said: “Intelligence sharing is an essential weapon in the insurance industry’s counter-fraud arsenal. By sharing data on suspect activity, we limit the propensity for suspected fraudsters to simply move around our industry. In the IFR, the industry established an effective and legally compliant platform from which to share proven fraud data. This ground-breaking next step will position the insurance industry at the forefront of counter-fraud activity.”
In 2016, the IFB will start work to develop a legal framework for a cross-industry intelligence sharing model and will commission a vendor to develop the system, with a view to launching in 2017. The intelligence sharing model will see suspect entities shared across all product lines, opportunistic and organised scams.
Sharing
Meanwhile an agreement between the Insurance Fraud Bureau (IFB) and the Information Commissioner’s Office (ICO) to share intelligence about the misuse of public data for insurance fraud purposes has been officially signed. Recent ‘crash for cash’ figures published in November 2015 by the IFB suggested some fraudsters are changing tack and moving into bogus personal injury claims fuelled by practices such as ‘claims farming’ and ‘data vishing’. The IFB is working with insurers and the ICO to monitor these types of frauds and are tracking and collating evidence where data misuse for insurance fraud purposes has occurred, or where misuse may lead to fraud. This includes investigating where fraudsters attempt to trick people into releasing valuable personal data. The ICO is also enforcing against those responsible for nuisance calls and spam messages that bombard individuals, some of which may go on to make exaggerated or unmerited compensation claims.
Stephen Dalton, Head of Intelligence at the IFB, said: “We know that organised insurance fraud is changing and fraudsters are moving into other types of scams which include practices like ‘claims farming’ and ‘data vishing’. We as an industry recognise that more needs to be done to combat these activities, which has led to the IFB working more closely with the ICO in recent months to tackle this increasing problem.
“Over the last six months the IFB has been meeting regularly with the ICO to share data and intelligence to identify fraudsters. This new agreement will formalise that existing arrangement and strengthen the excellent partnership that the IFB and ICO have been building over the last six months.
“Intelligence Sharing Agreements (ISA) form part of IFB’s long term approach to working with key partners and organisations to share data and disrupt organised cross-industry insurance fraud and we hope to sign more agreements in the future with other key organisations and regulators.”
Steve Eckersley, Head of Enforcement at the ICO, said: “We welcome the work the IFB has been doing to share intelligence with us and this agreement should further strengthen our partnership. As the UK’s independent regulator we take action against companies who try and market services illegally via nuisance calls and texts and we can issue large fines where necessary. We are also concerned about the unlawful trade in personal data, particularly the data that finds its way into the hands of criminals. During our investigations we often see problems beyond our area of regulation. This agreement and others like it enable us to pass on information for organisations to take further action.”
