Report comment

In addition to the ‘crash for cash’ phenomenon published by the Insurance Fraud Bureau (IFB), the Association of British Insurers (ABI) has previously estimated that undetected motor insurance claims fraud totals £350m a year – also published by the IFB. Both reports present shocking figures considering there is no need for such vast expense and loss to continue when fraud can be so readily mitigated against with the use of telematics.

The use of telematics has moved on from a concept to a globally recognised technology, therefore the question should be why insurers aren’t doing all they can to educate the market pointing out the advantages of reducing the chance of fraudulent claim activity. Insurance telematics allows insurers to identify discrete behaviours and therefore assess with far greater accuracy whether the facts presented to them are accurate or not, and therefore where the fault actually lies. For example, was the driver exceeding the specific road’s speed limit? Did the incident occur where it is claimed it did? Was there sufficient braking? Was the driving behaviour of the entire journey uncharacteristic compared to recent history, suggesting either a different driver, or an impairment such as intoxication? By analysing the data on a granular level, insurers can immediately discredit claims that simply do not stack up.

Furthermore, the figures available on fraudulent claims only reflect the fraudulent claims that are known about, so the truth of the situation is probably far more serious. Insurers would therefore be well advised to gather as much data on their customers’ driving behaviours as is available – without this, the industry is destined to suffer many more fraudulent claims and expensive losses.