Insurance scams are besieging London's streets. Highly organised gangs are luring motorists into staged crashes, escaping with the insurance pay-out, leaving the bemused and unsuspecting motorists none the wiser.
The situation has escalated to such a degree that the tabloids picked up on the story this week. The ABI claims that approximately 10% of motor insurance claims are thought to be fraudulent, resulting in payments of over £1bn per year.
Most of these claims are too small to set off alarm bells at the insurer - the technology employed by most insurance companies just does not have the sophistication to spot an anomaly in the swathe of such claims.
But this is not the way it has to be. Innovative insurance companies are beginning to choose technology that keeps a tight rein on all data involved with policies and claims. Business intelligence and performance management technologies aggregate claims and policy data to analyse, highlight and report on trends that would otherwise remain hidden.
With an estimated industry average of 10% of motor claims being fraudulent, this represents a significant opportunity to improve operational efficiency and margin.
Scams such as this one, invisible even to the victim, can be blown wide open by ensuring company data is analysed effectively. Putting in place the right technology does not have to mean a system overhaul, but has the potential to save insurance companies millions.
Senior financial services industry director