Professional body launches guide to tackle claims fraud

The Society of Claims Professionals (SOCP) has today published a guide for claims professionals, offering four key recommendations on how to identify and reduce fraud.

The Good Practice Guide aims to explain the difference between true fraud and the possibility that a claimant has simply misinterpreted their insurance policy.

To achieve this, the guide adheres to the FCA’s definition of insurance fraud: “when someone invents or exaggerates a claim or does not tell the truth in order to obtain cheaper cover.”

Clarifying fraud

SOCP’s guide examines why fraudulent claims are an issue, why individuals commit fraud, the different types of fraud being committed and how claims professionals can detect a fraudulent claim.

The guide advises that unless there is sufficient evidence to the contrary, a claims handler should approach each case with the mindset of wanting to retain the customer once their claim has been properly managed.

Furthermore, the guide suggests that claims handlers take time to build a full picture for every claim, considering the specific circumstances, so that each client is treated fairly.

Recommendations

The Good Practice Guide culminates in four key recommendations for claims professionals. These are treat the customer fairly, maintain high quality data, understand the fundamental dishonesty rules and keep up to date with new types of fraud.

Jeremy Trott, non-executive director at SOCP, said: “It is important to note that, according to statistics from the Association of British Insurers, more than 112,000 cases of attempted claims fraud were detected in 2017, worth nearly £1.3bn.

“However, while fraud is still a timely and costly drain on the insurance sector, claims should still be considered carefully so that, not only [is] fraud recognised where it genuinely occurs, but also that clients have access to protection when it is warranted.”