New five-year strategy will also see the bureau become a central hub of all fraud data and intelligence
The Insurance Fraud Bureau (IFB) will expand its fight against fraud across all general insurance lines from 2015 as part of its new five-year strategy launched today.
Organised liability fraud, which includes ‘slip and trip’ scams and fraudulent industrial disease/injury claims, looks set to be top of the IFB’s hit-list as it moves beyond its historical focus on motor which it now considers a “managed risk”.
The new strategy has been developed after a nine-month industry consultation and review and will also see the IFB define an industry strategy for managing intelligence and establishing a central hub for all fraud data.
IFB director Ben Fletcher said: “Organised criminal gangs targeting our industry are not product loyal. Until now, there has been no visibility or management of organised fraud across other product lines, beyond motor.”
Some 88% of members surveyed said industry management of ‘crash for cash’ had improved significantly in the past five years and 90% agreed that the IFB’s services should be extended beyond motor.
“The industry has now spoken,” Fletcher said. “And while ‘crash for cash’ will remain a core focus of the bureau, the IFB has been entrusted with leading the fight against organised fraud across all general insurance lines.”
The IFB was set-up in 2006 with a team of 10 and the goal of tackling organised motor fraud estimated to be costing the industry about £2bn annually. Since then it has growth to a 35-strong team and its investigations have led to more than 1,000 arrests and 260 years’ prison time for UK motor insurance fraudsters.
Going forward the IFB also plans to expand the breadth of stakeholders that it engages with to share data and intelligence beyond the insurance industry.
“With a single view of all insurance fraud intelligence, the IFB will be best-placed to compile industry-wide threat assessments and engage law enforcement agencies and regulators with much stronger propositions,” Fletcher said, adding that he was already in discussions with the National Fraud Intelligence Bureau and the Counter Fraud Checking Service, which were both keen to engage with the IFB.
To implement the proposed changes, Fletcher admits that the IFB will need more resources, at a cost to the industry.
ABI members will be charged a one-off levy to fund the first year-long planning phase, as agreed by members of the General Insurance Council (GIC), which will be about 20% of members’ annual IFB levy.
LV= managing director and IFB chairman John O’Roarke said: “Work in 2015 will initially focus on identifying where the IFB should focus first, taking into account the relative risks and likely return on investment from the different product lines. Collaboration with the industry in 2015 will also define options to standardise and centralise intelligence sharing.
“Tackling organised fraud is like squeezing a balloon – you solve one problem over here and another one emerges over there, which is why a big part of the strategic review was to broaden the scope of the IFB’s activities.”
AXA fraud manager Richard Davies agreed.
He said: “We characterise organised crash for cash as a managed risk. It’s still a very much a big problem for the industry and consumers and crash for cash certainly hasn’t gone away, but we’ve got a very solid foundation to expand our focus forward. The IFB is now a very credible body, not just within insurers, but also across sectors.”
The IFB funding model will also change as part of the five-year strategy and is likely to take the form of a gross written premium funding model.