ILC ARTICLE

Verisk warns of rising fraud risks

14th November 2023

The insurance industry has been warned of the increasing risk of fraud as more and more advanced technology is available to more people.

Gina Millard, Strategic Account Director, Verisk, said that developments in technology pose a risk on two fronts: insurers may adopt new systems or processes that leave them more vulnerable to fraud, while wider access to technology means a greater number of people are now able to target insurers.

She said, “Technology is impacting every aspect of the claim, so we have a really big challenge within the insurance industry to improve processes while at the same time keeping customers happy and safe.

“The big risk is fraud because technology is available to anyone. There is a growing number of fraudsters trying to manipulate the process and, because of the cost-of-living crisis, there are also more normal policyholders exaggerating their claims.”

Detected

She cited figures from the Association of British Insurers that revealed instances of insurance fraud to the value of £1.1bn had been detected last year, which equates to one case every five minutes, with another £1.1bn estimated in undetected fraud.

Gina said, “Fraud is very real and we know how much it costs the industry. But it is the unseen fraudulent claims that are the concern; if we can’t see them, how can we protect the industry from them?”

To help combat the increasing threat of fraud, Gina explained that Verisk has developed a patented AI-powered technology that involves a deep analysis of claims. The solution doesn’t just assess the validity of the image, but it also analysis the pixels within the image to test if they’ve been manipulated.

She said, “We looked at 81,000 image appraisals over a two-year period and we saw a 16% increase in severity and cost, that represents a £1m indemnity. Nine per cent of the images were duplicate, and 701 claims were suspected or actual fraud.”

She concluded, “We need to protect ourselves, we need to protect our indemnity, and we need to protect our customers.”

Gina was speaking at ILC’s ClaimsTech LIVE 2023, which took place in September at etc venues, 133 Houndsditch, London – backed by Headline Sponsor CoreLogic, along with Gold Sponsors Entegral, Solera Audatex and Verisk, and Silver Sponsor Synergy Cloud.