Keoghs' fraud index illustrates new levels of sophistication
Fraud Aware Issue 4
Keoghs annual Fraud Index, now in its seventh year, shows that while the top hotspots remain the same, there are new levels of sophistication amongst fraudsters who are increasingly aware of detection methods used.
As part of our ongoing work in helping insurers fight fraud, we produce an annual Fraud Index. The index is an analysis of all suspicious motor insurance claims presented by our clients to Keoghs for resolution during 2014, grouped by the address of the claimant.
In this year’s top 10 locations, the leading five areas are once again Birmingham, Manchester, East London, Bradford and North London, changing slightly in order on the previous year. Underneath that, Leeds, Oldham and Nottingham jumped up the table as key fraud hotspots.
One of the main highlights in the motor section of the Fraud Index showed the changes in organised fraud rings. 38% of all claimants were linked to a fraud ring, a number that continues to increase over the years (this figure was 23% four years ago).
63% of all claimants linked to fraud rings were not necessarily grouped by one fraud type, e.g. staged or contrived accidents, instead the links came from another part of the claim such as other areas of the supply chain.
Ruth Needham, Director of Fraud Rings, commented: “Organised fraud over the years could be identified by a common element, whether it was a major town or a particular fraud type like staged accidents. What is interesting in our latest analysis, is firstly the evident decline in areas which have been regularly at the top of the hotspot lists – e.g. Slough or Preston – and an emergence of other areas not usually known for fraud ring activity – e.g. York and Guildford. Secondly, rather than connecting fraudulent claims by the modus operandi, we’re finding the connections can be via multiple elements which vary from claim to claim. Is this indicative of an organised fraudster understanding the mechanisms that the industry uses in relation to identifying fraud?”
James Heath, Director of Counter-Fraud Services, said: “While the main hotspots have changed little, the way in which fraud is perpetrated has taken on a new level of sophistication. It is clear that all data linked to a claim needs to be identified and validated to find that crucial part of the jigsaw that shows a claim to be fraudulent. Insurers have made huge advances in their methods of detection, but cannot rest on their laurels if they are to get ahead, and stay ahead, of fraudsters.”
The full Keoghs Fraud Index report is now in available for clients. This year the report looks at a wide range of areas, reflecting activity in the market as those targeting motor look to also exploit other areas such as liability, disease, credit hire and healthcare.
Please contact your client account manager for more information.