Global Insurance Fraud Summit 2021 – challenges and trends

March 8th, 2022

2021 saw the third Annual Global Insurance Fraud Summit, a two day event that brought together industry organisations from around the world, consortiums, insurance fraud and insurance crime bureaus, regulators and insurance fraud experts to share experience and ideas to fight insurance fraud. The Summit sought to discuss global challenges that insurance providers, government agencies and consumers are facing today.

This article seeks to outline some of the key topics covered, global issues and challenges and some of the topline solutions discussed to help the global fight against insurance fraud.

Common global insurance fraud trends

There is no doubt that insurance fraud is a global issue, and that insurance criminals are highly mobile. Insurance crime no longer recognises borders, which is encouraging countries to share information and intelligence with each other. Insurers are also seeing more fraudulent activity from younger people in their teens and twenties.

Regions such as Europe have technology and systems in place that allow them to work together on insurance issues – for example their Europe-wide vehicle identification imagery database and vehicle green card system.

Let’s take a look at some of the common global insurance fraud trends highlighted at the Summit.

  1. Vehicle crimes that lead to Insurance Fraud
  • Increase in theft of keys and or leaving key fobs in vehicles and vehicles left unlocked
  • VIN switching
  • Increase in shipping stolen vehicles
  • Cloning registered vehicles in different states (i.e., registering same vehicle multiple times in  different states)
  • ‘Key learning abuse’ (i.e., reprogramming key fobs)
  • Higher theft numbers for vehicles identified without immobilisers
  • Cloning key fobs
  • Theft of high-end vehicles
  • Catalytic converter thefts due to the high value metals they contain
  • Technology that gangs are using is evolving and sophisticated
  • Gangs are placing GPS trackers on pre-identified vehicles, then tracking the vehicle to steal later
  • Spare parts are in high demand therefore ‘chop shops’ are in high demand (it’s easier to sell  a stolen dismantled car than a stolen whole car)
  • Staged car accidents
  • Theft of financed vehicles
  • Theft of leased/rented vehicles
  • Provider fraud (auto-repairers)
  • Staged auto collisions increased
  1. Travel Insurance Fraud
  • Travel (planned medical care and beauty operations claimed as acute injury/accident)
  1. Home and Contents Fraud
  • Exclusive watches
  • Fake receipts
  • Organised fraud
  • Burglary claims
  1. Medical Insurance Fraud
  • Exaggerated hospitalisation (false claims) decreased due to COVID
  • Medical Advertising Brokers falsifying medical treatment records

In terms of volume, vehicle crime is a large problem across the globe. Stolen cars can be used for other criminal activities, not just insurance fraud. Technology is supporting fraudulent activity too, as fraudsters become more capable of tinkering with car key fobs and GPS tracking.

How are countries tackling insurance fraud?

Most countries participating in the Global Insurance Fraud Summit had a centralised fraud entity working for them, much like New Zealand’s Insurance Fraud Bureau. If they didn’t, then the insurance industry would have a centralised data or intelligence service they could work with to combat fraud.

Common across all countries was that insurance fraud was being tackled with analytics that enabled detection, alerts and reports, and shared information amongst their member organisations (ie. insurers or intelligence services). This enables countries to take action against insurance fraud, investigate insurance fraud, or put preventative measures in place.

Importantly, the insurance industry is working with data and intelligence partners, across the world to take an intelligence-first approach to fighting insurance fraud. Technology will be key in the fight against insurance fraud to detect and deter fraud, both within a specific country, but to tackle cross-country fraud too.

How has Covid-19 and technology advances impacted global insurance fraud?

Insurance fraud has continued to rise across the world over the past few years, much like the general rate of crime. Covid-19 has typically had a negative effect on gangs who look to other forms of crime to improve their financial situation, or individuals who are suddenly in financial strife as a result of Covid-19.

As technology advances are made, cyber crime has increased as criminals seek to interact digitally with customers. Technology has also made it easier for organised crime to move across borders and target other countries.

Where to next for global insurance fraud?

Thankfully, insurance providers and their partners are seeing the benefits of collaboration, intelligence sharing and increasing public awareness. Insurance providers are also seeing that they’ll need to extend this collaboration outside their borders to get the full benefit of intelligence sharing.

The scope of collaboration is also growing with stakeholders starting to include vehicle manufacturers, social services, in addition to the expected law enforcement and industry body investigative units. It is clear that further collaboration, across borders and widening the stakeholder pool, will benefit the insurance industry.

Know people making dishonest insurance claims?

Do the right thing! Do your friends and family a favour and tell them not to. Let them know that the actions they’re taking are considered fraud and is a criminal offence. Importantly, if they get caught, a conviction can prevent their ability to get or maintain finance, including a mortgage. 

You can also report insurance fraud by visiting our website. You can make reports anonymous if you wish.

Insurance fraud is not a victimless crime.  It is a crime that all policyholders pay for.