Insight 40 - Magazine - Page 33
"We’ve invested in
the tools, technology
and people necessary
to create a robust
counter-fraud
capability, helping
to ensure the cost of
insurance fraud is
not passed onto our
customers"
recovered. These costs are frequently in
the tens of thousands of pounds. Although
this would normally be covered as part of
the customer’s insurance policy, because
the customer inadvertently (and often
unknowingly) claimed via a CMC or AMC,
the insurer is both unaware of the claim
and unable to help the customer.
INVESTMENT AND INDUSTRY FIRSTS
To protect customers from the effects
of fraud, Aviva continues to invest in its
detection capabilities. This has seen Aviva
double the number of employees dedicated
to investigating fraud, as well as delivering
more than 6,000 hours of counter-fraud
training for its people.
To protect customers from the effects
of fraud, Aviva continues to invest in its
detection capabilities.
Aviva has also invested in vigorously
defending fraudulent or inflated claims
and, where appropriate, aiding in the
prosecution of those who have committed
fraud. Last year the insurer helped secure
more than 17 years of custodial sentences
from prosecutions, and 39 findings of
Fundamental Dishonesty – the latter of
which obliges the dishonest claimant to pay
the costs of defending the spurious claim.
Aviva also secured a landmark deterrent
against committing fraud, working
with the Insurance Fraud Enforcement
Department (IFED) last year to secure the
first Serious Crime Prevention Order
(SCPO) against a convicted fraudster.
A breach of the order can result in an
immediate custodial sentence of up to
five years and an unlimited fine, and
is expected to be a powerful weapon
preventing known fraudsters from
reoffending.
Aviva recently used another available
tool to recover a fraudulent settlement
payment. The money was held in a bank
account belonging to the fraudster and
subject to an Account Freezing Order (AFO)
obtained by HMRC. Section 303Z17A of
the Proceeds of Crime Act was introduced
at the end of 2023 and allows victims of
crime – in this case, Aviva – to apply for
the release of money which belongs to
them but is restrained by an AFO. Aviva is
believed to be the first insurer to test the
new legislation and successfully recover
its loss.
APPLICATION FRAUD AND ‘GHOST
BROKING’
Aviva identified fraud on more than 51,000
motor policy applications, up 64% on 2022
policy fraud detection figures. The sharp
increase reflects the continual training
and investment that Aviva has made in
its policy fraud detection capabilities. By
keeping known fraudsters off its books,
Aviva is able to protect customers from
the worst effects of policy fraud, ensuring
its genuine customers don’t pay for the
actions of fraudsters.
These figures also include policies sold
by unregulated third parties, known
as ‘ghost brokers’. Ghost brokers act
as an insurance intermediary and
purchase insurance policies using false
or misleading information about the
customer to acquire cheaper insurance.
Ghost brokers will then frequently alter
the insurance ‘policy’ before sharing
with their ‘customer’ to show ‘proof’ of
their insurance purchase. However, the
insurance policy is all but worthless,
as the ghost broker obtains the policy
through lying and misrepresenting the
identity and/or nature of the risk being
insured (such as address, age of driver,
etc.).
The result is that the ‘policyholder’
directly compensates the fraudster for
a worthless policy, meaning they are
driving without valid insurance which is
not only illegal, but also carries all of the
associated risks of driving uninsured.
LIABILITY FRAUD
The next largest area for fraudulent claims
is in liability, such as bogus slips and trips.
Fraudulent claims for liability represent
23% of all fraudulent claims detected by
Aviva. Despite the number of fraudulent
liability claims remaining flat, the value
of these claims has grown by 9% yearon-year, highlighting the importance of
detection in this area.
HOUSEHOLD FRAUD
Household fraud accounted for 6%
of detected fraud and was primarily
comprised of claims for valuable items.
The most popular items that were
fraudulently claimed for were:
• Jewellery/rings
• Mobile phones
• TV's
• Laptops
• Tablets
Pete Ward, Head of Claims Counter Fraud
at Aviva, said, “We’re here to help our
customers when something’s gone wrong,
settling their claim quickly and fairly. But
where we detect fraud, we will vigorously
defend fraudulent or inflated claims and,
where appropriate, prosecute those who
target Aviva. We’ve invested in the tools,
technology and people necessary to
create a robust counter-fraud capability,
helping to ensure the cost of insurance
fraud is not passed onto our customers.
biz4Biz.org
33