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Digital trends in insurance fraud

Digital trends in insurance fraud


As technology develops and changes, it is changing the way crime is committed – including insurance fraud. IAG New Zealand’s Fraud Intelligence Team has been monitoring these developments and changing the way it investigates fraud to keep ahead of these trends to ensure the vast majority of customers – the honest ones - don’t end up paying the price of crime through increased premiums.

“We are seeing the use of technology in fraudulent insurance claims increase, particularly in the use of online market places to facilitate fraud,” said Natasha McFlinn, IAG Fraud Intelligence Manager.

“Digitally forged documents have been around for some time but we are seeing an increase in them as people’s familiarity with digital technology increases.”

In some claims, fraudsters pretend to own items claimed for that they’ve never owned using computer technology to suggest evidence of ownership.

Meanwhile, online spaces have also become a popular destination for fraudsters. “Through online marketplaces some fraudsters seek to obtain a second hand item cheaply and then claim they have had a brand new or higher model item stolen. Others try to sell unwanted items that they claimed were stolen and have had replaced via an insurance claim.

“We monitor sites like Trade Me closely to prevent and detect fraudulent activity, so the message is that fraudsters will be identified.”

In New Zealand, IAG has a variety of tools and methods that it uses to detect fraud. It uses internationally recognised software to detect and respond to fraudulent claims. The software is highly regarded and used to detect criminal activity by military intelligence, law enforcement and financial institutions in over 100 countries around the world.

On top of that, IAG NZ has a team of fraud analysts and a team of fraud investigators, totalling 25 people whose fulltime job is to combat insurance fraud. These individuals come from a wide range of law enforcement, intelligence, statistical and insurance backgrounds, so the teams have a wealth of knowledge and experience to draw on and can cover any possible fraudulent incident. They also engage external experts as required such as forensic, fire or traffic crash specialists.

People often underestimate the consequences of committing insurance fraud. “Our team also checks for suspicious claims on ICR (the Insurance Claims Register), which is a central database that the majority of insurers load claim details into, enabling insurers to check a customer’s claims history. If you are flagged in the ICR for fraudulent activity, it’s unlikely you’ll be able to get insurance again which could cause serious problems if you’re trying to buy a house and need insurance to get a mortgage. We have also been involved in cases where the end result was jail time for the fraudster”.

Insurance fraud pushes the cost of premiums up for everyone but customers can help by reporting instances of insurance fraud and taking steps to protect themselves and their items.

“Customers can also register the serial numbers of items they own on the Police SNAP website, meaning if they’re ever stolen Police can return the items if recovered. Registering also helps prevent criminals from on-selling stolen items”.

ENDS

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