Fraud bureau success set to continue

by Gill Montia

Story link: Fraud bureau success set to continue

The Insurance Fraud Bureau (IFB) is celebrating its first anniversary with the news that in the first 12 months of its existence, work in identifying fraud risks should produce actual and anticipated savings of at least £8 million.

IFB Chairman, John Beadle, is urging the industry to look at how it can expand current anti-fraud practices into the commercial insurance sector, where he believes organised criminals are at work.

Staged and induced motor accidents will also be a priority for the Bureau in the coming year and the IFB is expanding its methods of collaborative working to identify new areas where fraud prevention methods will bring results.

In 2005, the insurance industry exposed and prevented frauds worth over £400 million; an increase of 50% on 2004.

Insurance fraud is complex. It can vary from the opportunistic (such a policyholder exaggerating a claim), to the organised (when it is planned by criminal gangs that will often use the proceeds to fund other criminal activity).

Induced motor accidents are an example of organised fraud, as are some cases of arson, fraudulent disability claims and supplier fraud (where insurers receive bills for work that has not done).

The Bureau believes that some criminal gangs have bogus claims running with a number of insurers at any one time.

Currently, insurers handling 95% of the UK’s personal lines claims are participants in the IFB service, which analyses the insurance policies and claims records of all participating insurers to identify suspicious activity.