Insurance Times speaks to the three finalists within the Fraud Solution of the Year category for this year’s Claims Excellence Awards, getting the low-down on cutting edge fraud technology as well as finding out why achieving the award win would be so important

In April, Insurance Times confirmed the finalists for this year’s much-anticipated Claims Excellence Awards, now taking place on 15 October. Within the Fraud Solution of the Year category are three hotly contested finalists, including claims management companies One Call Claims and Pact Global, as well as mobile phone insurance MGA so-sure.

Each of this year’s finalists are battling fraud in a different way, striving to support their insurer partners as well as aid customer outcomes.

For example, Dylan Bourguignon, chief executive at so-sure, believes that his firm’s social insurance model works to change consumer behaviour and deter fraud before the point of claim, thanks to a reward pot mechanism where policyholders and their friends get money back if they do not make a claim.

This, he said, addresses soft or opportunistic fraud, while so-sure’s technology and integrated systems work to eliminate hard fraud.

“The purpose of that is that by detecting and deterring fraud before they get to the point of claim and changing the behaviour of consumers around that, you’re then able to provide a much better customer experience,” he explained.

“It’s a win-win situation where you are creating a better customer experience and providing, as a result, also a better price.”

Being able to successfully address fraud within mobile phone insurance is paramount because it is so prevalent – Bourguignon said that in other lines of business, 15% to 20% of policyholders’ insurance premiums go towards fraud costs, however this is doubled for mobile phone insurance.

For Bourguignon, this fraud focus aligns with so-sure’s primary mission – to improve consumer trust in insurance.

He said: “For us, we’re dealing with fraud because yes, it’s going to benefit the underwriting, absolutely, but fundamentally it’s going to provide a better, faster customer experience.

“It’s a holistic approach to the insurance problem; we don’t think about claims as one thing, we don’t think about distribution as another thing. It’s a complete redesign of insurance, a redesign of the insurance product, the insurance experience and also the insurance proposition for consumers.”

Tiered approach

On the other hand, Mark Seddon, chief executive at Pact Global, said his firm uses a three-tiered approach to tackling fraud, which he developed after a personal stressful claims experience after his father’s death.

“I decided there was room for disruption and using 21st century technologies to automate [the claims] process and deliver mores security and better customer service,” he said.

The “foundation” of Pact Global’s model connects “all of the dots that insurers need to be able to validate a claim” by linking to “international data bases to verify the claimant and the claimant’s history, verify any convictions against them, verify the whole round picture of a customer so that you understand who the customer is”.

The second layer, said Seddon, is applying the insurers’ data to the picture Pact Global already has of the customer.

Verified in real-time, this investigates whether the customer has a relevant insurance policy for the claim they are making and will check policy wordings to see if they are covered.

“We essentially use the insurer’s data for them, allowing them to make a quicker decision on their customer,” Seddon added.

The final pièce de résistance is a layer of artificial intelligence (AI), which analyses statements that customers make via Pact Global’s web portal or mobile app – the AI assesses visual gestures, the tone and pitch of customers’ voices as well as what they actually say to decide whether the claim is genuine or fraudulent. This programme is called Face, which stands for fraud analysis cognitive engine.

If the AI, however, gets its assessment wrong – for example, a distressed tone of voice is similar to that of someone lying – then this can be corrected using the previous two levels of data.

“We’ve taken a front, middle and back end perspective,” Seddon added. “Our platform’s built like Lego; you tell us the blocks that you want and we’ll build the house for you.”

In-house response

For One Call Claims, part of the One Call Insurance Group, improving the fraud detection element of its claims process was a natural development. Thomas Williams, head of claims at One Call Insurance Group, explained: “One Call Insurance has been a leading hand with fraud in the broker market and we wanted to use some of that knowledge in the claims environment.”

Unimpressed with the available off-the-shelf options, One Call Claims developed its own in-house bespoke claims management system, which uses data to issue each claim with a fraud indication score.

Williams said: “The system very much does all the hard work in the background, calculating the risk for that particular claim based on the customer’s answers to the claims questions.

”Then we’ll give the advisor a fraud indication score at the end of that claim, so as soon as you click the button to submit the claim on to the system, it pops up and says this claim has scored X out of 100, therefore the risk is low, the risk is high.”

This simplicity helps to make the claims process more time efficient for One Call Claims staff, as well as ensures that working hours are spent investigating the right, potentially fraudulent claims.

Williams added that the system also helps speed up the claims journey for genuine customers, who may have been caught by more clunky fraud detection methods in off-the-shelf systems.

Who will win?

The finalists all concurred on how important achieving this award win would be for their businesses.

“It’s an important award to win,” Seddon said. “It will really rubber stamp what we’re trying to achieve for our partners and for their customers.”

Williams, on the other hand, said that One Call Claims would use the victory as part of its expansion plans, which involves providing their claims handling services to other insurers.

He said: “We’re looking to expand our business to offer claims handling services to insurers and this would build part of that. So, having this accolade that we’ve got this fraud prevention system would really give some tangible value on how good it is.”

For Bourguignon, it’s about industry recognition.

“It’s about recognition from a really well-regarded institution,” he said. “It matters to us to be recognised amongst our industry peers but also I think it matters to partners who are working with us or consumers. That’s why we entered.”