The Insurance Fraud Bureau (IFB) is a not-for-profit organisation formed in 2006 to combat the UK’s growing insurance fraud market, which it says is the biggest in Europe and the third-largest in the world.
Every year, the insurance industry identifies around £1.3 billion worth of insurance fraud, which equates to 125,000 claims and several hundred thousand policies.
As a result, IFB has in the last 10 to 15 years had to think “far more creatively” about how to solve problems of insurance fraud, according to its director Ben Fletcher, and an increased use of data and analytics has played an important part of its strategy.
Fletcher told Computer Business Review at SAS’s Analytics Experience 2018 event in Milan on Tuesday that people tend to think of insurance fraud as relatively low-level and opportunistic, but there’s a more serious and sinister side to it.
Tackling insurance fraud not just in the interest of insurance companies saving money, Fletcher said. The IFB sees examples of organised criminals taking vehicles onto the public road to stage accidents that lead to deaths of innocent members of the public.
“Fraudsters are trying to look at how a genuine process can be exploited for their own gain. If you take a road traffic accident, if you’ve got a car near the end of its life, they create the framework to enable people to have purposeful vehicles to dispose of their vehicle and then claim for an alternative car, loss of earnings, personal injury, all the things that didn’t happen.
“Ultimately, whether it’s that or whether it’s an inflated property claim, travel sickness claim, a lot of the activity is driven by professional enablers, so claims benefit companies, motor engineers, medical experts, lawyers – a lot of those have their own corrupt personnel within them in some way or another.”
The way that insurers have historically shared information about suspicions is largely manual, Fletcher said, often involving the sharing of spreadsheets, emails, and paperwork, as well as an often protracted system of sharing information with the police and insurance companies.
Created alongside SAS, the IFB’s digital platform, the insurance fraud intelligence hub, lets insurers share real-time information about suspects.
Fletcher said the IFB has a reasonable idea across the industry about what an average looks like, so it can identify the anomalies that could be signifiers of fraud.
Because fraudsters are attacking a range of public and private sector organisations, IFB works with HMRC, customs, tax office, and the department of work and pensions, among others, to help “bring the market together”.
“We don’t have any prosecuting powers, but we help in terms of bringing the market together; bringing data together: insurers as relatively competitive organisations wouldn’t necessarily want to give all their data and information to one another because they’d be concerned about the implications of that; however, they are happy to give it to the IFB. So the term we often use is we can act as the honest broker in the middle.”
The bureau has had to deal with this year’s GDPR rules “carefully”, Fletcher said.
“We engage with the information commissioner, we undertook a very early privacy impact assessment, we engaged one of the country’s leading barristers, and absolutely had to get the compliance aspects nailed down,” he told CBR.
“Ultimately over all the years when I’ve been to speak to the information commissioner, what they really want to see is [whether] the use of data is proportionate?
“You can demonstrate quite quickly that through how big a problem [insurance fraud] is and the harms it causes that unless you start to employ systems like this, there’s no way that you can replicate this manually.”