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How to tackle fraud in insurance

How to tackle fraud in insurance | Insurance Business UK

How to tackle fraud in insurance

claims polluted by fraud increased 13% last year, with the insurer uncovering over 11,000 instances of claims fraud – worth over £122 million. With fraud risk such a key consideration for companies across the entire insurance chain, the work of firms such as LexisNexis Risk Solutions to tackle this ongoing concern is coming into its own.

Listen now: How SME data validation can help tackle rising fraud risk

Speaking with Insurance Business UK, Martyn Mathews (pictured), senior director, personal and commercial lines, at LexisNexis Risk Solutions highlighted the maelstrom of challenges impacting the SME market and the implications these have on rising rates of opportunistic fraud.  

“Fraud in itself has always been around and will always move,” he said. “In fact, if you talk to most fraud managers in large insurers or any insurance organisation, they’ll talk to you at the moment about some of the changing dynamics of fraud, where fraud can be moving from personal lines across to commercial lines.

“And that’s ostensibly because there’s been a huge amount of digitisation and tools applied to the personal lines market. Fraudsters have often found it more difficult and, therefore, fraud is moving over to the commercial sector. That can take many forms.”

With the cost-of-living crisis still unfurling across the UK and making everything more expensive, it’s more difficult now to successfully operate a lot of new small businesses. This is leading to the temptation of small business owners to inflate the sums involved at the point of a claim, he said, and is also leading to the increased possibility of business owners misrepresenting what their business looks like and its financial stability at the point of quote.

“The types of fraud are not actually always uncommon from those that we’ve seen before in personal lines,” Mathews said. “But the key here is that it is moving from personal lines across to commercial lines. And that is where the market needs to now be on the lookout and do as much as it can to start to combat that type of activity. There are a whole host of things, including data and the more intelligent use of tools, that the market can do to start to assess those issues.”

Listen now: How SME data validation can help tackle rising fraud risk