The sheer volume of operations is causing the most problems for insurers
Ghost broking is a major concern for the motor insurance industry, according to the Hill Dickinson Claims and Fraud Index published exclusively by Insurance Times.
Hill Dickinson detected 11 ghost broking fraud rings in its Netfoil database over just 30 days of analysis, and the average ring was responsible for issuing 11.6 illegal policies to customers.
Hill Dickinson Counter Fraud Group head of fraud Peter Oakes said the problem that ghost broking presents to the insurance industry is more around the volume of ghost brokers operating in the market, rather than the sophistication of the fraudsters’ operations.
“Ghost broking is a very significant problem at the moment. The past two or three years it has been a massive problem and has been a real headache for our clients,” he said. “It’s a relatively new type of fraud. It almost exclusively takes place on the internet using aggregator sites and direct sales over the internet.
“A lot of it is relatively small scale, and when you look into it it is relatively easy to spot, but there is an awful lot out there. The problem is more the volume than the sophistication levels of the fraud.”
To find out more on the state of fraud in the motor insurance market read an update on the index here, or pick up your next issue of Insurance Times to read the full report on the index.