Michael Faulkner says connecting with customers is the way forward in fighting insurance fraud

' In its ongoing fight against fraud, just what can the insurance industry learn from the sale of ring-shaped bread rolls? Perhaps more than one might at first think.

I was reading The Times recently, when an article struck a chord with me. Apparently a few years ago a CIA analyst left the world of intelligence and began to sell bagels to hungry office workers.

His sales method relied heavily on trust. He would visit the offices on his round leaving bagels, cream cheese and a box for purchasers to put their money in. At the end of the day, he would return to collect the day's takings.

As one might expect, some people were more honest than others when it came to paying for their bagels, and some companies' workforces were more honest than others.

Over the years the bread seller collected a great deal of data about the honesty of the people to whom he sold bagels, to the extent that he was able to draw some conclusions about what prompted them to steal.

One of his theories was that the employees with the greatest morale - those who actually liked their employers - were more honest than those who were unhappy in their work.

If this was indeed the case, our former intelligence wizard ended up a innocent victim of workers' dissatisfaction.

As a general theory this throws up an interesting question when translated to insurance companies' continuing fight against insurance fraud. If insurers were liked more, or at the very least had a better image, would they be subject to fewer frauds?

It seems logical that if a company is viewed as a faceless organisation only interested in profit then people will feel less guilt-ridden about stealing from it.

Of course it would be naïve to suggest that insurance companies will ever be loved, but if people had a better understanding about how they worked that would surely be a positive step.

A recent survey by Accenture on consumers' attitude to fraud found that many people commit insurance fraud because they feel they pay too much for their insurance.

They simply don't understand why their premiums are set as they are and why they go up. Here is an ideal opportunity for insurers to connect with their customers by telling them a lot more about their reasons for setting premiums - and they need to take it.

The impact of insurance fraud on premiums is another issue that the industry could do more to address.

The vast majority of people understand that there is a link between fraudulent claims and premiums. The industry needs to emphasise this link and drive home how much fraud adds to the premium for each policy.

If all policyholders were made aware that the more fraudulent claims there are, the higher premiums will rise, wouldn't they be less likely to risk cheating in the first place? IT