The insurance industry must practice vigilance when it comes to cross-border motor claims amid the rising number of fraud cases linked to accidents happening in the UK, international insurance law firm DAC Beachfront and cross-border claims representative InterEurope UK have warned.
“Despite the drop in claims numbers with the reduced motor travel across Europe as a result of Brexit and the COVID-19 pandemic, fraud in cross-border motor claims has continued,” said Dan Prince, counter fraud partner at DAC Beachcroft. “Given that these motor claims fall outside the Official Injury Claim portal and once foreign motor travel returns to pre-pandemic levels, we anticipate this area will be targeted by an increasing number of fraudsters.”
Prince noted how insurers often overlooked these types of claims because of their “modest value.” However, they have become lucrative for fraudsters because of the “very attractive costs regime available” for bringing such claims.
“There is also a perception that those allegedly injured in an accident with a foreign-plated vehicle are ‘home and dry’ in terms of evidence to support the case, partly because in certain circumstances, the defendant driver has returned to mainland Europe and partly because there is an assumption that the driver would automatically be to blame due to inexperience with UK rules of the road,” he added.
Prince said it is important for insurance providers to be aware of their exposure and to have the necessary fraud indicators in their processes.
He cited the fraud identification process that his firm and InterEurope UK developed three years ago as an effective strategy in determining fraudulent cross-border motor claims. The process involved building a comprehensive and bespoke intelligence database, developing “know-your-opponent” strategies, and connecting with various law enforcement agencies, allowing firms to detect fraud and apply robust legal tactics to reject the claims.
To date, DAC Beachcroft and InterEurope UK have prevented more than 400 potentially fraudulent UK claims, saving European insurers more than £5 million in potential compensation. They have acted for more than 40 different insurance companies across Europe, finding elements of fraud in 94% of the cases they investigated. Of these, two-fifths were rejected in their entirety.
“Cross-border motor claims are a complex area involving many challenges which differentiate them from standard domestic motor claims, with foreign vehicles often being deliberately targeted by UK fraudsters,” said Anthony Madden, managing director of InterEurope UK. “Working with DACB, we have altered the perception that cross border motor claims must be settled and not challenged. This partnership has benefitted many European insurers who all take security from the service provided.”
