The job of an insurance investigator is not glamorous, but it can still attract the less scrupulous and unprofessional. Andy Duffin, operations manager at Property & Casualty Services Investigations, believes the insurance investigations industry would benefit from regulation
It is easy to style yourself as an insurance investigator. It is far harder to do the job well. Investigators operate at the sharp edge of insurance claims investigation; the zone where legal behaviour ends and criminal activity begins.
The work smacks of glamour. The word “investigation” hints of undercover work, of covert surveillance and of breaking elaborate fraud rings. The reality is more mundane. Today's investigator is more likely to sit in front of a computer screen sifting through databases, than in the front seat of a Ford Mondeo staking out suspects.
Investigators work in harmony with insurers' in-house claims teams and with loss adjusters. But they do not do identical tasks. An adjuster is hired to assess the insurance aspect of a claim; to handle issues such as liability and quantum. The concern of an investigator is veracity – to establish the truth or otherwise of a claim. Investigators act as the insurer's eyes and ears on the street.
Instructions to investigate can be triggered in a variety of ways. Some insurers insist on a random screening of their claims files. Others pass on only those cases which come under the suspicion of claims staff as being potentially suspect. Adjusters, too, refer cases to investigators, when a member of their staff raises doubts about a claim for one reason or another.
The investigator however, must approach each case with an open mind. I am personally suspicious of remuneration arrangements which give investigators an incentive to deny claims by awarding a share of the value saved. An hourly-rate or fixed fee arrangement is a far simpler way to work.
Investigations start with background enquiries. These familiarise the investigator with the file and the individuals or companies concerned. The most important step, however, is to take a formal statement from the claimant. This establishes the goalposts; it provides the claimant's definitive version of what happened. And it is the version of events an investigator will either confirm or disprove.
Depending on the case, an investigator may then call on the services of particular specialists. PCS investigations, for example, has teams specialising in motor claims, creditor claims, arson, fraud and financial investigations. There is also a surveillance unit, mainly composed of former military personnel, who have learnt their skills in an arena more testing than insurance.
These specialists will interview witnesses, check computer databases and follow any line of inquiry they can to get to the bottom of the claim. Frequently, they are able to confirm that a claim is absolutely genuine; that the insured who suffered a large loss days after taking out a policy was simply unlucky.
Cases can run for a few days or for over a year. There may be liaison with police and with other insurers. At all times a case should be handled in accordance with the rules of civil evidence and with an eye on the requirements of the Police and Criminal Evidence Act. There is no point running an expensive investigation if a potential prosecution is ultimately impossible because much of the evidence is inadmissible.
Unfortunately, there are few controls over who can be an investigator or how they operate. And the reputation of insurance investigations has suffered accordingly.
There are many examples of cowboy operators using questionable tactics to get “a result” for an insurer. The injury claimant who has rubbish dumped on their lawn to force them to perform for the camera is simply the best known example.
The frightening truth is that anyone can rent an office, print notepaper and set themself up as an insurance investigator.
Reputable firms try to distance themselves from fringe investigators. They vet staff and some, including PCS, have established voluntary codes of conduct for how investigators operate. The best investigators co-ordinate their work with police. This avoids the danger of an investigator blundering into a long-running police operation, and blowing the chances of both.
Professional firms will also ensure their staff know the insurance sector well and obtain Chartered Insurance Institute qualifications.
Insurers too are becoming more discerning buyers. They want to know how a firm will operate and to ensure, for example, the security and confidentiality of their customer data. With today's strict data protection rules, insurers must be confident that sensitive documents such as medical records are in safe hands.
But there is room to go further. Insurance investigation could benefit from oversight by an independent body, perhaps the Association of British Insurers. An industry-wide code of conduct, and the authority to see that it is implemented, would improve standards and make life far harder for cowboy investigators.
Investigators are ultimately on the side of honest policyholders. Insurers surely want to ensure that their customers are looked into and looked after by investigators of the highest quality.