At the end of each of the ICNZ Speaker Series webinars we open the floor to our attendees to ask their questions of our speakers.
During our fourth webinar in the series – Insights into fraud in times of recession – we ran out of time to answer all of the questions submitted, and so circulated the questions to our presenters after the session to see what they had to say in response. A full recording of the webinar can be found at icnz.org.nz.
The following responses have been provided by: Stephen Dalton, Head of Intelligence & Investigations, Insurance Fraud Bureau (UK); Maria Dal Cin, Senior Vice President Insurance Fraud & Operations and Bryan Gast, National Director, Investigative Services, Insurance Bureau Canada (IBC); and Aaron Soline, National Insurance Crime Bureau (NCIB).
It seems like that industry data sharing and co-ordination on fraud is much more mature overseas –I’m interested to know whether there was a specific watershed moment that led to this?
Insurance Bureau Canada (IBC)
In 2011, the Ontario (largest province in Canada) acknowledged the seriousness of auto insurance fraud by appointing an Auto Insurance Anti-Fraud Task Force to study the impact of the problem and make recommendations. The Task Force report urged insurers to move aggressively to establish an organisation that would pool and analyse claims data to identify potential cases of organised and premeditated fraud. Following that recommendation and after consultation within the industry, CANATICS was established. Its member companies represent approximately 75% of the Ontario auto market. In 2017 we created an insurance crime advisory group comprising of senior level claims and fraud leaders from across the industry. This group was instrumental in identifying the need for a cross-insurer group to collaborate and pivot from a focus on individual insurer fraud to a collective perspective and a shared goal to move fraud out of the P&C industry altogether. This led to the launch of IBC’s Investigation Coordination and Support Service which is proving to be a game changer in collaboration and tackling cross-insurer fraud.
Insurance Fraud Bureau (IFB) UK
In the early noughties, UK insurers started to receive feedback from defendant law firms (who work with a multiple insurers) of same subjects involved in similar claims. There was a recognition amongst a small group of leading UK motor insurers that their industry needed an holistic view of the claims across all insurers to identify this activity and attempt to stop it. It was agreed that a Bureau acting as an independent agency should hold the data for all and act as a coordination point. As a result of this the IFB was created.
National Crimes Investigation Bureau (NICB)
The NICB in the US is actually over 100 year old, and we have worked on a model of data sharing from the beginning. We started off sharing vehicle theft information and have progressed to sharing information in a variety of manners. NICB acts as a neutral, trusted, third party that allows the industry to share data to benefit all. The most recent large data sharing event was just over 10 years ago, when we approached the industry with an idea to share medical billing data to combat provider fraud. This idea has progressed into an Aggregated Medical Database that allows NICB to inform its members of providers who have aberrant billing patterns that are replicated across carriers.
What advice can you provide to third world countries, like the Pacific to tackle insurance fraud?
It goes back to awareness and education and getting the message out that insurance fraud is not a victimless crime. We ALL pay when fraud happens. Premiums go up. People get hurt. Local emergency resources are wasted (e.g. staged collisions). Fraud isn’t just about money. It’s got a much broader impact on insurance and society at large.
My advice would be to keep communication channels open. We have found that if something is happening to one organisation it is happening to many. Communicating with others in the industry helps to stop the fraud before the criminals can become really good at it. Early detection can have a deterrence effect on others. First and foremost, organisations must recognize that the costs associated with insurance fraud are significant and they must be willing to tackle the problem. Through the work performed at the NICB, we know that our collaborative approach to gathering and disseminating data often impacts many organisations because the fraudsters don’t target just one. The large scale, large volume fraud can only be discovered through aggregated data. Further, prosecutors must be willing to seek remedies on fraud cases and require restitution to insurance carriers. It is only through these means that we are able to slow the tide of insurance fraud
How do you get your fraud stats in each country? Is it compulsory for insurers to provide fraud claims data?
We get our stats from studies such as the Ontario Automobile Insurance Anti-Fraud Task Force study which determined the cost of fraud was between 9 -18% of premium costs. While this report was commissioned in 2012, most jurisdictions cite the incidence of fraud is in this range. We also have access to Statistics Canada data and access to the Canadian police information centre statistics.
At IBC it is not compulsory for insurers to provide claims data.
Not compulsory in the UK, data is collected by the Association of British Insurers (ABI). Collective fraud data is however vital in order to articulate the impact of fraud and lobby for changes (legislative or otherwise) to mitigate fraud losses.
NICB does not require companies to report Questionable Claims. However, we do pass the claims submitted to us on to State Government Agencies that do require reporting. We make the process easier for our members, they only need to report the Questionable Claims to us, and we will work to pass it on to the many State Agencies that require reporting. We have partnerships with most state agencies, so this makes the process convenient for our membership.
Should insurers be educating customers about what constitutes as fraud and its consequences?
This is essential. It begins with awareness. We are all victims of insurance fraud. In Canada, we focus on helping consumers understand and spot the risks – whether that’s ghost brokers online, or a staged-collisions.
Fostering this sort of awareness amongst our consumers is critical to fighting and preventing fraud. For instance, IBC has a tip line that receives many tips from concerned customers, employees, or neighbours. The more we can expand the public’s knowledge base, the better positioned we are to root out more fraud.
Yes absolutely, as fraud is not victimless, in addition to opportunist fraud, organised criminal gangs use the proceeds of fraud to fund other organised and serious criminality.
Yes. NICB frequently releases Public Service Announcements on fraud and how to identify it. We have several media campaigns that focus on different types of fraud and vehicle theft. These are well received by the public. We also highlight arrests and convictions for fraud whenever we can. Further, consumers have no idea of the magnitude of fraud that takes place. Campaigns such as “if you see something, report it” can make a difference.
Now, more than ever fraud detection methods are needed, some people will take the opportunity to exaggerate a claim taking the low risk, high reward rationale. What steps is your organisation taking to deter fraudulent claims? What public messaging/education formats are your using/promoting?
Education and awareness are key. We are very active on social media. We have a number of partnerships with law enforcement and run campaigns with them such as: Know Your Tow (Ontario), Slow Down – Take the Pledge (Peel region of Ontario), Project Lock-Up (Rural Crime in Alberta). We have numerous brochures on various topics related to insurance crime/fraud. We have created videos – on ibc.ca on how to spot a staged collision and we are very active during Fraud Month in March and run a Top 10 stolen vehicle campaign at the end of the year which gets a lot of media attention.
The UK has a freephone number to report insurance fraud and have recently launched some social media friendly animated clips aimed at raising awareness and preventing people from becoming victims of fraud see – https://insurancefraudbureau.org/stop-the-scams/
NICB maintains a hotline and web portal to report fraud to us. Every tip received from the public is reviewed. We also have frequent new releases on fraud related issues. These releases keep the issue in the public eye, so consumers can be advocates on our behalf in helping us to detect and deter the fraud. While the penalties for insurance fraud in the USA are not as stiff as we would like them, we still try to highlight them in our messaging to deter others. https://www.nicb.org/news/news-releases
Would you say that COVID-19 has had a positive or negative impact on your stakeholder relationships?
It’s forced our industry to come together. For example, when the pandemic hit, we knew our members’ customers would need help. That’s why our industry proactively offered relief to Canadian consumers hit hard by COVID-19. Overall, the premium relieved and deferred across personal and commercial lines was roughly $1.1 billion and $200 million, respectively, by June 30th. As bad as the pandemic has been, it’s also been an opportunity for us to demonstrate our value to our membership. The Investigative Services team continued to deliver our day to day services on top of some special COVID supports for our members.
We have greater engagement and more regular contact as a result of new technologies which allow for video conferencing. My impression is that our stakeholder relationships have improved as a result.
I would also say that our stakeholders relationships have improved. In this time when communication has been lessened due to COVID restrictions, NICB has hosted webinars and discussions on the fraud that has taken place as a result of those same restrictions. These forums have allowed our members to benefit from the information we have gathered from them and our others sources. Our data sharing partnerships also allow us to pass on fraud warnings and concerns to our members in automated fashion so they can implement this into their systems.
Responses to questions asked for specific presenters
For Maria Dal Chin – IBC
When advocating for a tougher stance on fraud with government, it is on fraud generally, or specifically insurance fraud?
As we advocate on behalf of our members of the Canadian Property and Casualty insurance industry, our advocacy is focused specifically on insurance fraud.
For Aaron Soline, NCIB
How does USA measure its questionable claims? Are these actual claims fraud cases or actual plus suspected? How does NICB get this info?
The Questionable Claim data is sent to us by our members. In will include actual and suspected fraud cases, as different states have different reporting requirements. As I mentioned in the previous answer, the NICB acts as the conduit for many of the state fraud bureaus. Each state fraud bureau has its own requirements, so the definitions differ. The information is submitted to us through an online portal, which allows members to build the questionable claim off claim information already stored within the system. The submitted completes some additional required and optional fields and then sends the Questionable Claim on to NICB.
Is there a correlation in the US between lack of health insurance and exaggerated injury claims? Did the Affordable Care Act make any difference to these kinds of claims?
We have never measured this. We have looked at the cross over between Health Insurance, Property, and Casualty insurance. We see some of the same people committing fraud in all three markets. NICB only covers Property and Casualty, but we intersect our medical data with Government Health Insurance data and we see cross over in this as well.