Did you know that January is the highest risk month for staged motor accidents, particularly between 6pm and midnight and on Sundays, when there are fewer witnesses on the road? Or that staged accidents tend to occur on C or unclassified roads, compare to genuine accidents which are more likely to occur on busier A roads?
That’s the latest assessment according to a new set of fraud indicators that are diving deeper into the signposts insurers use to detect fraud. Law firm DAC Beachcroft has launched a new set of ‘dynamic indicators’ for motor, public and employers’ liability, built from in-depth analysis of information held in the firm’s databases, and which are designed to overlay extra levels of “constantly updated data,” on to existing static fraud indicators used by insurers.
“It’s very difficult to know exactly what the proportions of fraud are, because by its very nature you don’t know the precise figures, but it’s certainly not decreasing,” Catherine Burt, head of counter fraud at the law firm, told Insurance Business in an interview.
While the industry is working hard to combat fraud, it’s playing a game of whack-a-mole: no sooner does it manage to crack down on fraud in one area, than the fraudsters pop up in another.
“We’ve always tried to keep one step ahead, and tried to develop new ways of identifying and dealing with fraud, because we know that for some people, this is their business, so they are constantly evolving their ways of working,” Burt said of the so-called professional fraudsters.
The new indicators have also found some trends that run contrary to existing data on fraudulent claims, Kate Abrahams, head of intelligence at DAC, explained. While insurers have typically found commercial vehicles are a key target for induced accidents, DAC data found that over the last 12 months there has been a decrease in the targeting of those vehicles, while regular, family type vehicles have increasingly become a target.
The new indicators identify a range of emerging trends and patterns in fraud, particularly in relation to time, weather conditions, vehicle types, geographical location, and changes in claimant profiles and behaviours.
“Static fraud indicators will always play their part, but it is the analysis of multiple data sets which provides a more sophisticated method for detecting fraud,” Burt commented. “Insurers will be able to use the new indicators both to prevent policies being sold to known or suspected fraudsters at the outset, and to identify and defeat fraudulent claims.”
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