Insurance companies are not doing enough to combat insider fraud, warned specialist IT consultancy Detica.
It said fraud prevention measures deployed by most companies only focused on detecting well-known and popular methods of fraud which many have already been victim to.
Few, if any, were addressing the more challenging issue of recognising more complex fraud, such as those perpetrated by well-organised and determined fraudsters, often working in collaboration with people on the inside of insurance companies, said Detica.
Detica head of insurance Richard Love said: "In terms of prevention the solutions deployed today are widely recognised to account for little more than a pin-prick in an elephant's back.
"Insurers need to accept that the systems and processes in place today spot only a fraction of the fraud committed and hence are failing to thwart the more skilled criminal."
He said insurers needed to focus on detecting and preventing previously unidentified types of fraud, for which Love said technologies and proven processes already existed. He said insurers also needed to address the problem of internal collaboration.
"Fraud has become a board level issue," said Love. "Only those companies that confront the real problem and demonstrate an ability to tackle complex fraud will be able to pass on the benefits, particularly in terms of price, to their customers."
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