"Rules-based fraud identification is now extremely challenging due to the impacts of Brexit, Covid, the Whiplash reforms, inflation, and fraudsters being better at what they do," Dan Prince, Partner at DACB, commented. "We worked collaboratively with Clegg Gifford to develop a cradle-to-grave approach to fraud identification and claims handling using innovative identification methods, in-depth data analysis, early investigations and proactive evidence-gathering. Underpinned by clear processes, we liaised with regulatory bodies to pursue sanctions and with underwriters to stop policies being written. An average of four new claims, per day, are being triggered for fraud using this model.
"Fraudsters are also moving away from injury and even credit hire to bent metal and theft/fire/flood, across 1st and 3rd party claims, because this is where they maximise more significant, easier and quicker sums."
DACB's claims data show how motor trade insurance is exposed to these challenges in fraud, which is often organised and part of wider criminality. Examples have included:
- Thefts of prestigious vehicles which form part of large, organised crime group activity.
- Repeated policy purchase attempts after data have revealed fraudulent previous activity.
- Dashcam and telematics tampering and cloning of vehicles.
- Falsification/exaggeration/shallow-faking of engineering evidence and repair estimates to secure total loss findings on high value vehicles.
Data analysis in one case identified staged incidents involving the same repairing facility. Telematics showed that the vehicle had been driven to the garage shortly before the incident and analysis of dashcam footage revealed the garage attempted to remove the dashcam before covering up the lens. The telematics data showed one vehicle driven to the accident location and a subsequent collision. The investigative work resulted in supporting a wider industry investigation and a DACB evidential package to support a criminal referral.
Prince added, "Finding new ways to beat the fraudster is not always about new systems or IT. It can simply be looking at areas that fraudsters are penetrating and developing a strong solution to this. Naturally, a lot of emphasis is put into claims handling but focussing on process, identification and prevention, as we've done for Clegg Gifford, has achieved these exceptional results."
Graham Lee, Counter Fraud Manager at Clegg Gifford, commented, “This is a fantastic example of a close and effective partnership between a managing agent and supplier delivering significant success. DACB and CG have developed an innovative and cost-effective solution associated with the validation of fraudulent insurance claims. CG is committed to minimising fraud across our industry and the associated unnecessary indemnity spend. The initiative has been adopted as BAU and allows CG to promote a robust fraud strategy aimed at doing the right thing, at the right time for the benefit of genuine customers, partners, and investors alike."
