DAY in day out, we hear about the impact of fraud on the personal insurance market. The industry-led Insurance Fraud Bureau (IFB) was formed to work on this area specifically and their hard work, alongside insurers has really helped to bring the issue to the forefront of people’s attention. Indeed, we all pay for it as undetected general insurance claims fraud total £1.9bn a year and add an average of £44 to our motor insurance premiums each year.
But what about corporate fraud? Zurich has been in the corporate insurance market for nigh on 90 years and so we have developed expertise across the business into what makes business work, but also, what stops business working. Criminal and fraudulent activity is rife across many aspects. We see particular issues in small businesses and sole traders with claims for things like arson, malicious damage, escape of water and theft. Many wholesale and other businesses are facing similar financial pressures, particularly with the slowdown of the property market (difficult to sell or rent premises), the reduction in public spending and increased running costs. We also see what we call underwriting fraud – cases of deliberate misrepresentation or non-disclosure as customers look to reduce their premiums by falsely representing key facts. And then there’s fraud linked to employees claiming for injuries or illnesses allegedly caused by the workplace or work practices; occupational disease fraud.
So what are we doing about all this? At Zurich we’re investing in fraud and working very closely with the police authorities as we have a policy of always prosecuting cases we uncover. Therefore the more resourced we are to identify it at source, the more we can pass to the police and any saved costs can be passed onto our customers. We’ve created a new network evaluation team to really analyse some of the flags raised across our business. We have a fraud ring handling team to handle the bigger cases and an occupational disease centre, which is leading a counter fraud initiative to identify the fraudulent activity that is prevalent in that sector. That initiative alone has resulted in a fivefold increase in cases where fraud has been detected.
So, we’re aware of all these things, but are you? Have you considered these aspects in your workplace or business? How much could you be saving by working with your insurer to crack down on these issues? It could end up saving you both money and stress in the long run.
If you suspect any form of insurance fraud, call the IFB Cheatline on 0800 328 2550.