Insurers must invest in fraud detection technology

Aron Thompson, head of insurance at independent price comparison and switching service uSwitch.com, described the insurance fraud figures released yesterday by the ABI as “alarming”.

“Fraud is a huge issue within the car insurance industry and undoubtedly it does increase the cost of insurance premiums for honest individuals who have never made a fraudulent claim,” he said.

Thompson said that there were two types of fraudster: the ‘well planned' fraudster who takes out a motor policy with the intention of making a claim; and the ‘if I can get away with it' fraudster – who could be an honest member of the community but would look to inflate a claim figure following a genuine accident or might include some items in a theft claim that were never in the car.

“With nearly three million insurance claims made in 2005 alone, insurance providers need to continue to invest heavily in the new technology needed to investigate fraud effectively.”

Thompson proposed measures including the use of combination questions and accident inspectors, and highlighted Aviva's use of voice stress analysis to help them identify if the person they are dealing with is telling the truth. However, he urged that more needed to be done to deter customers from committing fraud.

“If a consumer is convicted of fraud,” he added, “it will become very difficult to get car insurance in the future so making a fast buck could result in a lifetime of excessive insurance costs.”

“Although we do acknowledge that some consumers will not realise that a claim is technically fraudulent, people should seek advice from their insurer to ensure this is not the case and that they are claiming what they are legally entitled to,” he concluded.