In 2012, the Ontario Automobile Insurance Anti-Fraud Task Force found that “fraud is substantial and has a material impact on premiums,” particularly in relation to automobile claims.
In fact, despite a significant decline in collisions and automobile-related injuries, the industry distributed $2.4 billion more in benefits than it did four years earlier.
As a result, Canadian National Insurance Crime Services, or CANATICS, has developed a new tool that will combat fraudsters by pinpointing suspicious claims that insurance companies can then scrutinize independently.
"Organized crime rings that stage collisions and fraudulently bill insurance companies should be very nervous right now," CANATICS President and CEO Ben Kosic said in a statement. "For years many of these criminals have eluded detection by spreading their behavior across multiple insurers. As of today, they can run but they can't hide."
The agency felt compelled to design this defense mechanism, as a single imitation collision can yield over $100,000 in duplicitous payouts. It employs cutting-edge analytics to pool data from multiple sources across the industry to flag unusual patterns among individuals.
Its aim is to target organized and premeditated cases of fraud, which insurers can then investigate and possibly prosecute at will. The alert system will operate across industries, since insurance fraud is now pervasive throughout many Canadian organizations, in the public and private sector.
"Organized crime rings routinely involve medical facilities, body shops and tow truck operators,” Kosic said. “In one recent case there was even a police officer involved, which demonstrates just how far-reaching and sophisticated these groups can be. We now have an industry-wide solution that is equally sophisticated."
In addition, CANATICS hopes to see wide scale implementation of this mechanism, since its membership includes 75% of the auto insurance marketplace in Ontario.
New members are encouraged to join, since that expands the data that can be pooled for better fraud detection.
"We're pleased to have three quarters of the market on board, and we look forward to increasing the participation in the future," said Kosic.
