The ABI Wake-Up Call: 19% Less Fraud, But 20% Increase in Fraudulent Claims – How To Spot And Stop Critical Illness Fraud

In the aftermath of the ABI (Association of British Insurers) revealing that cases of insurance fraud had fallen by 19% in 2022, but that the value of the average fraudulent claim had risen to £15,000, a year on increase of 20% between 2021 and 2022, the insurance industry was left scratching its head as it wondered how it might be targeted and tricked in the future by scammers intent on finding a way of manipulating the system to get something for nothing. As until both the cases, and the value of the fraudulent claims fall in tandem, mendacity and duplicity will continue to plague the insurance industry.

Obtaining goods, monies or services by means of deception is the very definition of fraud, but as long as the temptation of potentially “pulling the wool” over an unsuspecting and trusting insurance company exists, someone, somewhere is going to try to cash in on a big payday. Which begs the question, how can the industry stop them attempting to defraud it or make it so difficult that would be fraudsters don’t even want to try.

There isn’t a uniform answer, as the solution to preventing car insurance fraud will be different to that for travel insurance fraud, and will, inevitably, vary considerably from sector to sector. And even though on the surface, it might appear that life insurance brokerages and companies have the odds stacked in their favour and their own “Get Out Of Jail Free” card as a death certificate is required to claim the benefit promised by the premium, and being dead is nigh on impossible to fake, they aren’t immune to a little back door criminal shenanigans.

Criminals can, and have attempted to exploit an additional service that life insurance brokerages and companies offer, critical illness insurance. How can the insurance industry combat and fight back against the threat of critical illness fraud and ensure that those who are genuinely ill and deserve to be paid in full are, while those spinning a web of deceit and trickery are halted in their tracks?

This pervasive challenge has spurred some insurers into action, forging a fortified line of defence that not only shields genuine claimants but also deals a decisive blow to those who seek to abuse the system. United by a steadfast commitment to transparency and integrity, insurance companies are now deploying cutting-edge strategies and knowledge to unearth fraudulent activities, all while equipping sales agents with the skills needed to thwart such attempts effectively.

As technology propels our world forward, fraudsters also adapt, making identification a challenging task. Critical illness fraud, a deceitful ploy where individuals fabricate claims to secure unwarranted pay outs, has emerged as a significant threat. However, the insurance industry is not sitting idle. Industry leaders have embraced innovative tools and methodologies, harnessing data-driven insights to unmask patterns and anomalies that raise red flags. By delving into medical records, financial histories, and behavioural cues, insurers can now paint a comprehensive picture of each case.

One technique at the forefront of this battle involves cross-referencing medical information with an individual’s claims history. By scrutinizing the chronology of claims and comparing them against genuine medical records, insurers can quickly discern whether the critical illness claimed is genuinely critical. This not only safeguards the integrity of the system but also prevents potential exaggerations or outright fabrications.

In addition to historical analysis, advanced data analytics is emerging as a potent weapon against deception. By employing machine learning algorithms, insurers can identify unusual patterns in claims submissions. This could include claims originating from unrelated medical facilities or displaying an inexplicable urgency. This proactive approach ensures that suspicious claims are flagged for thorough investigation before any pay outs are made.

Prevention is the cornerstone of any effective strategy, and it is a responsibility shared by insurers and their clients. Insurance companies are doubling down on consumer education to ensure policyholders understand the claims process inside out and the dire consequences of fraudulent behaviour. Through comprehensive, transparent communication, potential fraudsters are discouraged, while authentic claimants feel secure and supported.

Moreover, insurers are redefining policy verbiage to elucidate the criteria for critical illness claims. This not only aids sales agents in presenting accurate policy details but also guarantees that customers possess a crystal-clear understanding of the covered conditions. By shining a spotlight on policy specifics, insurers are effectively deterring individuals who may be contemplating fraudulent claims, making the boundaries of deception increasingly defined.

Sales agents are the linchpin of the insurance industry, occupying the front lines in the battle against fraud. Empowered by comprehensive training and a wealth of resources, these professionals are well-equipped to spot the subtle signals of potential deception during client interactions. Through active listening and astute observation, agents can discern discrepancies between clients’ statements and their documented medical histories, setting the stage for further investigation.

However, their role extends beyond mere detection. Sales agents forge relationships grounded in trust, a critical factor in deterring fraudulent activities. A rapport built on genuine care and professionalism becomes a powerful deterrent against those who might contemplate deceitful actions.

When confronted with potential fraud, sales agents are encouraged to exercise discretion and diplomacy. Rather than confrontational accusations, agents are trained to deploy artful questioning in a non-confrontational manner. Open-ended inquiries, woven into the conversation, often yield more information than closed questions, allowing agents to grasp the nuanced details of each situation.

Should suspicions persist, agents are empowered to escalate their concerns to dedicated anti-fraud departments within their respective organizations. These units are staffed with seasoned professionals experienced in investigating complex cases, often collaborating with legal authorities when required. By entrusting experts skilled in fraud detection to lead the way, insurers ensure that investigations are unbiased and exhaustive.

David Brewer, the CEO and Co-Founder of Protect Line (https://www.protectline.co.uk/), one of the companies standing firmly on the frontline of Critical Illness fraud prevention added “Training and vigilance are the two best weapons that we have to fight fraud, but we shouldn’t let them erode the trust that needs to exist between agents, brokerages, companies and their clients. It isn’t easy, but with the right methodology in place, we will eventually make insurance fraud a thing of the past”

As the UK insurance industry faces the evolving challenge of critical illness fraud, unity is paramount. Insurance companies, fuelled by technological advancements and ethical imperatives, are cultivating an environment where integrity reigns supreme. Sales agents, armed with comprehensive training and resolute dedication, serve as the guardians of authenticity. Together, these stakeholders are not just preserving the safety net of insurance but are actively reinforcing it, ensuring that when the moment of need arises, it remains steadfast and unwavering.