The mysterious case of the insurance cheat and the fraudulent claim

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With ABI figures(1) today showing a 24 per cent increase in insurance fraud over the last two years, esure has responded to this upward trend by boosting its in-house fraud and claims verification team by almost a third(2).

New recruits will be trained in specialist detection techniques such as cognitive interviewing which is designed to reveal tell-tale inaccuracies and inconsistencies in fabricated stories. This expertise, combined with the company's computer-based Voice Risk Analysis(3) technology that identifies minor changes in someone's voice caused by stress, will continue to help esure tackle the growing problem of fabricated and exaggerated insurance claims.

A recession and general squeeze in household purse-strings often causes people, no matter what their financial or social backgrounds, to view insurers as a way to improve their financial situation by:

generating cash flowing e.g. by fabricating a car theft or writing off a car to get a cash settlement;
upgrading or getting a new/replacement item e.g. dropping a TV to claim through accidental damage cover on a home policy;
repairing completely unrelated damage on a vehicle e.g. claiming for repairs to expensive gear box systems or ad hoc electrical faults as part of a minor collision;
covering the cost of a voluntary or compulsory excess by slightly inflating a claim e.g. adding an extra item into a theft claim such as a laptop in the boot of a stolen car or an additional power tool in the garden shed.

Due to the company-wide crackdown in detecting fraudulent claims, esure has also seen an increase in 'walk-away' claims. Policyholders are given the opportunity to close their claim at any point after registering it with no ramifications or mark on their records. An answer phone is now available for policyholders to call out-of-hours to avoid speaking to a call centre agent to close their claim, such as leaving a message informing esure that they have found their 'stolen' vehicle with no damage.

Last month esure identified a hike in fabricated low-value car theft claims where an increasing number of 'stolen' car claims for vehicles worth less than £5,000 were being lodged. In such cases, the cars are often fraudulently hidden in lock-ups rather than stolen. esure responded quickly by stepping up its use of sophisticated cognitive interviewing techniques on all reported 'stolen unrecovered' low-value car claims in an attempt to stem the surge in these types of claims.

Gordon Hannah, Director of Claims and Operations at esure, said: "The ABI's figures highlight the recent surge in insurance fraud - both when policies are taken out and when claims are made. Left untackled, this type of fraudulent activity will have a knock-on effect of increasing premiums for millions of honest motorists and homeowners across the UK.

We have found cognitive interviewing to be an effective way of spotting and clamping down on attempted fraud during the claims process. That's why we are strengthening our team of skilled interviewers to crackdown on claims cheats.

Call centre agents are also extremely vigilant at the front end when a policy is bought over the phone, such as looking for evidence of fronting(4). Meanwhile, behind the scenes all new policyholder details are run through a shared industry database to detect any mismatch in addresses, credit card details or undisclosed claims.

Insurance is there to help honest people with genuine claims and we're doing all we can to crackdown on people who are trying to abuse the insurance system in these difficult economic times."

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esure's press contacts:

Adrian Webb, Head of Corporate Communications: 01737 641000
Niki Bolton, Corporate Communications Manager: 01737 235070
Asia Manzoor, Public Relations Officer: 01737 641305
Emma Lloyd, Assistant Communications Officer: 01737 641309
Email: pr@esure.com
An ISDN line is available for radio interviews.

Notes to Editors:

ABI report on the rising cost of insurance fraud
Exact figure = 27 per cent, representing a planned boost in in-house headcount from 11 to 14 within the next month.
Voice Risk Analysis is a technology that identifies micro changes in the voice that can occur when a speaker is showing higher levels of stress while giving a statement or answering a question. It is used with policyholders' consent only.
Fronting is the practice of a parent insuring a car that is primarily - or solely used - by a son or daughter in order to obtain a cheaper premium. Often, the parent uses their address knowing that the son or daughter is actually using the car in a different location such as college or university. With a fronted policy, the mature, experienced driver persuades the insurer that they are the main driver of the car and that it is based at their home to take advantage of their lower apparent risk factors, when in fact neither is true.

About esure:

esure was launched in 2001. The company offers car, home, pet and travel insurance over the internet and by phone. esure also offers car insurance cover through the brands Halifax, Sainsbury's, Sheilas' Wheels and more recently home insurance through the Sheilas' Wheels brand.

Sponsorship:

esure has secured two of the UK's most iconic sponsorships: the ITV National and Channel 4 Weather bulletins.

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