fraud · 2020-03-10 · confidential what is fraud 3 coming home i drove into the wrong house and...

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Fraud Conundrum

ICB Annual Conference

Sedick Isaacs

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4 March 2020

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Contents

Insurance Fraud

• What is Fraud?

• Is SA unique?

• Global Fraud

• Our experience

• Claims Verification Unit

• Fraud Detection

• Collaboration and ICB Benefit

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What Is Fraud

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Coming home I drove into

the wrong house and

collided with a tree I don't

have.

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Claim Payments

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Check for cover

Policy unpaid

Process Claim Suspected fraud

SIU to investigateMotor / arrange assessment

Check use of vehicleIs panel beater on approved panel

Provide car hire? And ensure vehicle returned asapCheck for previous damage report

Authorise the claim

Rebuild or cash

Cash down payments

Reject claim

Ombud

Payment receivedReconcile cash with claim

Pay clients excessTrigger amendment of Claim Free Group

CFG Not amended at renewalAmend system

Obtain salvage of write offCollect all papers

De-register vehicleIf payment received

Allocate salvage paymentIf payment received

Loss Adjuster

Average

ForensicsFire Claim Quantum

Check for cover

Policy unpaid

Process Claim Suspected fraud

SIU to investigateMotor / arrange assessment

Check use of vehicleIs panel beater on approved panel

Provide car hire? And ensure vehicle returned asapCheck for previous damage report

Authorise the claimMonitor progress and keep client/broker informed

Client signs releaseHand over to TP Recoveries

Contact TP to request paymentNo response from TP

Rebuild or cash

Cash down payments

Service issue

Legal route

Reject claim

Ombud

Payment receivedReconcile cash with claim

Pay clients excessTrigger amendment of Claim Free Group

CFG Not amended at renewalAmend system

Obtain salvage of write offCollect all papers

De-register vehicleIf payment received

Allocate salvage paymentIf payment received

Loss Adjuster

Average

ForensicsFire Claim Quantum

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Motor Insurance

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What Is Insurance Fraud

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Soft Fraud

Hard Fraud

Inflation Fraud

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Is SA Unique ???

The other car collided

with mine without giving

warning of its intention.

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Is Fraud In South Africa Unique???

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SA R6 – R8 Billion

Est 30% of claims

have fraudUSA $80 Billion

At least $30 Billion

Est Personal

GB Est £2 Billion 10% of losses

estimated to be

fraudulent

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Global Fraud

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Global Type Fraud

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• Phantom Vehicles (UK 8% Est)

• Organised Fraud Rings (UK 15% Est)

• Low Speed Impact (30%+ Est UK)

• False Slip and Fall claims

• False Disability Claims

• False Whiplash Claims / UK

• Medical inflation or non existent claims with providers

• Identity Fraud (14,4m in 2018 US)

• Staged Home Fires

• Staged Road Accidents (UK Est 7%)

• Storm Damage Fraud

• Faked Death Claims

• Cyber crime (Increased criminal opportunity) 2019 - 165m Sensitive Records exposed

• Est losses 2019 $3,5b

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Our Experiences

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Internal Customer Broker

Third Party Syndicate

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Our Experiences

Recovery Clerk provides

his own bank account

for recovery payments.

Internal

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Our Experiences

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Customer

Cell phone fraud case.

Accident Staging

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Our Experiences

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Broker

Cell Phone Fraud /

Falsifying Documents

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Our Experiences

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Third Party

Intercepted email on

Renewal of Broker .

R1.5M

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Our Experiences

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Syndicate

Paper Vehicle Insured / Stolen

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Bryte Claims Verification Unit

Purpose: Effective Management of Claims Fraud

Claim Investigation

Fraud Analysis

Protect Our Customers

Zero Tolerance

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Claims Verification Unit (CVU) Key Functions

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Provides guidelines to fraud investigation

Evaluate any reports for investigation

justification

Determine the procedures

Investigate Fraudulent claims

Recovery on Fraud Cases

Law enforcement

Protection of customer data

Fraud Education and counter fraud initiatives

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Claims Verification Unit (CVU) Stats

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• Fraud Savings in 2019 amounted to +- R67m

• Targeting 15% return

• By investigating around 8% of all claims

Savings Related To :

• Fictitious Claims

• Misrepresentation

• Non disclosure

• Non existence

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Collaboration with ICB

Vehicle pounds

Education and Training

Sharing of information

Retention of records and access

Checking of red flag clients

Syndicate Identification and Eradication

Panel Beater Syndicates

Collaborate with SAP Direct ICB benefit +_ 50% of Bryte Saving

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Fraud Detection

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Going to work at 7am this morning I

drove out of my driveway straight into a

bus. The bus was 5 minutes early.."

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Data AnalyticsAnalytics

Claims Activity

Criminal Fraud

Cultural Fraud

New Fraud Trends

Analysis

(Data Mining Tools)

Trends

(Quantitative Analysis)

Red Flags

(Employee Training)

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Trend Analysis

Claims

Management

Process

New and

Innovative Claim

Handing Tools.

Predictive

Modelling (Suspicion Score)

Data Analytics

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Finding the right piece???

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Foundational Framework

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Claims Data Analysis

Measurement and Identification Tools

Adding value to customers

File review / MI / Analyse trends

Accuracy of knowing what to look for and being able to quantify the

effect on claims. Recognise and Identify suspicious looking claims

Counter fraud activities should be a protection and benefit for the

vast majority of customers

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Claims Management

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Differentiating among

claims processes that will

easily highlight potential

fraud

Managing the drivers

of customer

satisfaction

Remembering the

majority do not commit

fraud

Strengthening

inspection and loss

adjustment

Capabilities

• Technical skills

development

Fundamentally rethinking the

pathways for resolving claims

to assist with Fraud Mitigation

and elimination

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Technology / Analytics / Collaboration