There has been a lull in the volumes of certain types of traditional fraudulent claims during the lockdown period
Fraud managers are braced for “an avalanche” of illicit claims when lockdown measures have dissipated, Insurance Times has heard.
The Insurance Fraud Bureau’s Stephen Dalton said a Covid-19 group had been set up in May and is already meeting regularly to discuss current trends.
Speaking at the recent Insurance Times July Fraud Charter virtual event, sponsored by Carpenters Group, he said: ”It’s fair to say it’s a mixed picture at the moment because certainly the feedback we’re getting is that there was a lot of anticipation about what might happen, but some of that anticipation or speculation hasn’t actually transpired as yet.
”There’s still a sense of waiting for the shoe to drop in terms of what happens when furloughing ends and how that might drive fraud in certain ways. The business interruption case that’s going through the FCA at the moment may drive fraud in certain directions”, Dalton added.
Dalton said a number of firms had registered ’coronavirus’ as a business name, suggesting, so-called claims farmers gearing up for activity.
Ghost broking was also on the rise back to ‘normal’ levels, he added.
Jason Potter, BLM Law’s fraud lead, also said he was witnessing a rise in potentially fraudulent claims as lockdown measures have been eased.
That includes an increase in claims farming activity, more on the corporate vehicle side as personal car claims have gone down due to the lockdown.
”I can see opportunistic fraud increasing,” he added.
David Royal of Aviva told the panel that he was seeing early signs of increased motor fire claims. Within Aviva, he said they were seeing most of the uptick in the non-GI side of the business, such as pensions, healthcare and investment.
Zurich’s Scott Clayton said the lockdown period had given them some “breathing space in terms of what’s coming round the corner”.
“I think we’re still in the ’quiet before the storm’ period, and we expect things to pick up dramatically between now and the end of the year,” Clayton said.
”The financial implications [of Covid] are going to hit people and businesses further as government assistance ends and the furlough scheme stops,” added Royal.
On the travel insurance side, Royal expects to see an increase in baggage and personal item-type claims increasing as a way of funding the breaks that people are needing at the moment.
The panel discussed the potential for claims trends to move from Covid back to more traditional forms of fraud such as motor claims, but the possibility of lingering opportunistic fraud stemming from financial hardship brought about by the pandemic persist.
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