Commercial claims fraud was the largest component at £14.8m
Risk and business solution firm Sedgwick saved its clients £35.2m in 2019 through its claims fraud strategy, an 18% increase on the £5.4m it saved customers in 2018 across home, commercial, motor and liability claims.
Steve Crystal, head of financial crime at Sedgwick International UK, said: “We’re pleased that our strategy of working in partnership with our clients has seen us protect their reputations and save them money with a strong counter fraud performance in 2019.
“We’ve noted an increase across all products, most notably motor and liability; the latter has seen a steady rise across the last few years.
“Commercial claims fraud, which can be variable, was the largest component at £14.8m and home claims fraud once again saw a high volume of lower value cases, reflecting the more opportunist nature we’ve seen in this product over the last five years.”
Sedgwick has 80 employees working in dedicated counter fraud roles.
Its fraud strategy consists of a primary and secondary screening process; the primary process sees claims handlers and adjusters considering claims against indicators to be mindful of – these vary by product, and are reviewed regularly. The secondary process uses data to look for patterns and matches that might be of interest.
Referrals generated via this screening processes are then triaged by the counter fraud team to determine the next steps, for example does the claim warrant investigation, or is it safe to proceed? Following triage, any claim with concerns that merits investigation activity would move to the counter fraud team for enquiry.
False claims on the rise
In its end of year fraud review, Sedgwick predicted that false claims will continue to develop.
However, the firm noted that claims fraud doesn’t always lend itself easily to statistical analysis because the rules of the game aren’t fixed.
Crystal added: “We’re investing in technology, but it’s our experts who make a difference when it matters. Perpetrators think differently, often randomly, and motives [or] methods change.
“[Artificial intelligence] tools, coupled with better cross industry collaboration, are at the heart of our activity, but we shouldn’t underestimate the resolve of some fraudsters and their determination to beat the system.
“Fraudsters who deliberately invent claims will no doubt invest energy to work out how to exploit weaknesses in fraud defences. That’s why our approach is geared to tackling those who will always seek to find ways to bypass detection measures, with our experts interpreting what the fraud analytics are telling us.”
Crystal continued that Sedgwick’s fraud strategy centres around prompt action, attention to detail and establishing rapport. “We recognise that most insurance claims are valid, and that part of what matters to genuine consumers is that suspect claims are quickly identified and tackled,” he said.
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