A leading insurance fraud expert questioned insurers' use of Digilog's voice risk analysis (VRA) software in motor theft claims.

He slammed the technology as being less effective than conventional anti-fraud initiatives and warned that it could have a damaging effect on customer retention.

The fraud expert, who oversees counter-fraud initiatives at a leading insurer, said an analysis revealed that Digilog achieved poorer results than his company's existing anti-fraud techniques and could dissuade customers screened by the system from renewing their policies.

"I'm staggered the Digilog bubble hasn't burst, there is no cost benefit data available and when I asked Digilog for this there was none forthcoming," the source said.

He added that his company's "nil paid settlement rate" on motor theft was 50% higher than "the reported performance of one leading company using this system".

The source said the impact of the Digilog process on customer retention had not been measured.

"All customers are warned about fraud checks in the course of their initial call, and subsequently asked 'are you really sure you've told me the truth about that?' How would you react as a genuine claimant? Is this acceptable? Would you renew your policy with the same insurer next year?"

But Digilog argued that VRA software was detecting more fraud than conventional counter-fraud techniques.

Digilog managing director Kerry Furber said: "Success varies according to the levels of fraud that different books of business are exposed to, but we are seeing a huge increase in the detection of fraud and corresponding savings."

Claims specialist Brownsword, which manages the Digilog process on behalf of several insurers denied that cost benefit data was not made available to insurers.

"Every single client is provided with cost benefit data," Brownsword chief executive David Brownsword said.

Esure - which has been running a pilot on high-risk motor claims - said it was likely to continue using the Digilog process, though no "permanent decision" had been made.

An Esure spokesman said that customer retention rates would increase as a result of the Digilog process. "A lot of people don't like the fact they could be paying for fraud - the beauty of the Digilog process is that genuine claimants could have their claims paid twice as fast," the spokesman said.