In Ireland, a coordinated industry campaign cut fraudulent claims by over 10%. Pressure is mounting for the UK to follow suit. Caroline Jordan reports
Over a year ago, the ABI sent a fact finding delegation to Dublin. They met the Irish Insurance Federation, then in the second year of a high profile fraud-busting campaign. But, while the Irish have just announced TV advertising among their latest tranche of initiatives, the ABI is tight-lipped about whether it is planning a similar campaign.
Chris Hannant, head of fraud at the ABI, says: "I'm not prepared to give any details. We may be considering something, but ideas are under discussion. There is nothing concrete."
But beyond the walls of the ABI, insurance fraud chiefs are understood to be talking about focusing on local press campaigns, based on advertising and in particular, PR. The aim will be to convince news editors to run stories about convicted insurance fraudsters.
John Beadle, counter-fraud manager at Royal & SunAlliance and chairman of the Insurance Fraud Bureau - which aims to improve data sharing among insurers - admits the industry has not been quick off the mark to launch a co-ordinated anti-fraud campaign. But he insists that action is planned.
"This is an official ABI workstream. We must get it right, we can't allow a campaign to use up vast amounts of resources. We also need different strategies because fraudsters fall into different types."
Beadle favours a 'naming and shaming' strategy targeting the local press. "This would target the opportunist fraudster. The last thing the WI or golf club member would want is to be talked about in connection with insurance fraud."
Of more serious cases, Beadle says shock tactics are not the answer. "The work we are doing through the bureau is already having results. Such criminals are finding insurance fraud is a lot more aggro. They know they may end up in jail and are looking at other forms of crime. We're getting a lot better at catching these people."
One area of concern is that there is no widely publicised single number the public can phone if they suspect someone is committing insurance fraud. In the Republic of Ireland, a manned telephone service, Insurance Confidential, is the lynchpin of its anti-fraud campaigns. In the UK, a service known as Cheatline is more often than not an answerphone.
Nick Young, a specialist insurance fraud lawyer with Davies Arnold Cooper, says: "I thought Cheatline was pretty much moribund. But, a campaign would be a good idea. We need to know what the industry is doing and to show it's serious about tackling crime.
"Meanwhile, it's good news the Insurance Fraud Bureau is up and running - let's just make sure people know about it."
He would also like to see emphasis on commercial insurance fraud. "This can be where the big money is, but the focus is always personal lines."
Last year, Davies Arnold Cooper conducted research that found commercial fraud costs the UK business community at least £550m a year. In contrast, the ABI says the cost of motor and household fraud is around £1bn a year.
There may be widespread lack of awareness about these big numbers, but this is not the case when it comes to insurance fraud aimed at local authorities.
Fraudline, run by loss adjuster Cunningham Lindsey, is currently used by some 37 local authorities across the UK. The company's business development manager, Natalie Bevan, says the campaign - based on leaflets and posters - works on two levels.
"It's aimed mainly at public liability claims, such as trippers and slippers, but also at employees who are claiming against their employers. Some people, who are off work, put in a claim as soon as they stop receiving sick pay. This puts pressure on the wage bill and our message is: any type of fraud can result in a reduction of services. Local authorities have large deductibles and so pay many claims themselves."
The phone line is staffed 24 hours by a Cunningham Lindsey team. "We receive a lot of calls out of work hours and pass data on to the police. People don't like answerphones and often won't leave messages."
Bevan says that there may be scope to take Fraudline to a wider audience beyond local authorities. "We've shown it works."
But she adds that naming and shaming of fraudsters is not a route she necessarily favours. "If a case gets to court and an individual is named this may act as a deterrent. But, we need to be careful as far as data protection goes and not all cases will be prosecuted. It may well be the information we provide means the claim will be repudiated; this acts as a deterrent in its own right."
Naming and shaming may even have the reverse effect, she says, pointing out: "You have people now who think it is cool to collect Asbos."
There is also the question of how anti-fraud campaigns are funded. In Ireland, insurers are apparently happy to stump up for big campaigns, but UK insurers appear less keen to do so.
Chris Hill, head of claims fraud for Norwich Union, says rather than insurers funding a standalone campaign they should concentrate on lobbying government for "a permanent official UK body to oversee the development and implementation of a national fraud strategy".
The attorney general's office recently produced a review of fraud, with recommendations for consideration by the Home Office. These include setting up a national fraud reporting centre and the establishment of fraud as a national policing priority.
Hill adds: "A top priority should be to generate support for implementation by the government of the review's key findings. These include the need for a coordinated national fraud awareness campaign."
This sounds good in principle, but will the ABI be able to bring its influence to bear on the government, or will there be insufficient funds in the public purse? The Irish report premiums are falling partly in response to its success. Will the ABI have similar messages to impart? IT
' See next week's issue for our fraud round table special. And our Fraud Question Time on 6 November will deal with all the major issues. Contact Claire McShane on 020 7618 3417 for details
High profile Irish campaign helps cut claims by 15%
The Irish Insurance Federation (IIF) was under pressure from the government to take action against fraud in the late 1990s.
At the time, the cost of insurance fraud was estimated to be at least €100m a year. "Insurers agreed to pay a levy to support the campaign, which has been based around print, billboards, radio and now TV advertising as well as the hotline," says IIF public affairs manager Carmel Mulroy.
A protocol was set up with the Gardai (the Irish police) to ensure that information supplied by the public was passed on efficiently to help mount more prosecutions.
In addition, insurance fraud was defined as a crime in the Civil Liabilities and Courts Act 2005, with a fine of up to €100,000 and up to 10 years in jail.
"Insurers can also ask claimants to provide a sworn affidavit now. It is another deterrent and we also have new software to help cross reference claims," says Mulroy.
Net incurred claims are 10% down across the board compared to last year and in motor, they are 17% down.
She says: "We can't say the campaign is the only reason for this, but it helps. In motor, premiums are also down by 45%. We still have work to do and we're not complacent, but we'll be sticking with it, in fact we're ramping it up."