A report by the Insurance Times, currently featured in the September issue, highlights a ‘new wave’ of fraud hitting motor insurance, underpinned by figures released by Synectics Solutions.  Matt Stanton, Head of Business Intelligence spoke to Insurance Times’s John Manley and described how in the past year there has been a significant rise in the number of cases of Current Address Impersonation - identity theft - where fraudsters have stolen the ID of a law-abiding person to take out insurance policies. 

The figures were reported in the Synectics Solutions National SIRA Fraud Trends report and show a rise of impersonation fraud and identity theft cases reported to the National SIRA database from just nine in the whole of the first half of 2016 to 2,357 in the second half of last year.

In the article, also available on the Insurance Times website, Matt tells the publication that insurers need to be alert to the threat of impersonation fraud, if they’re not already.

Explaining the trend, Matt states: “Rather than manipulating their own details to get quotes and policies, these fraudsters find a good quality applicant from somewhere in a low risk area and they use those details to incept a policy.

“Normally the fraudsters would place themselves as named drivers because they could exploit the loopholes in due diligence checks, where insurers were only checking the policyholder.

“Most of the time initially, the fraudsters were just looking for a cheaper policy. But more and more we’re starting to see the claims coming through now.”
In the first quarter of this year, SIRA recorded 45 claims registered against these fraudulent policies.

“We’re starting to see the claims being made on the back of these policies, and therefore losses, so it isn’t just the insurer losing money that they should have in terms of the policy.

“There’s the problem for the insurer in terms of the monetary loss and the reputational damage, but you’ve also got some innocent parties potentially not even knowing that wrongdoing is occurring in their name.”

In the article, Matt says the findings of the report should serve as a warning.
“As with all fraud, it continually evolves and therefore it is vital that insurers and brokers remain vigilant and conduct thorough due diligence checks on all parties associated to a policy application.”

The increasing attempts of criminals looking to perpetrate impersonation fraud within the insurance industry demonstrate why it is increasingly important for all companies in the financial services industry to adopt a collaborative approach to combat fraud. 

Accessing shared resources to help identify those looking to commit fraud, whether its impersonation fraud, identity theft, or any other type of financial crime, helps to enhance the ability of companies to reduce fraud and prevent losses – by removing fraudsters’ options to exploit weaknesses in individual company approval and vetting processes.   

The National SIRA syndicate members, and those populating other collaborative data bases such as CIFAS, are leading the way in this effort.