HBOS to roll out Digilog fraud system for household claims

HBOS General Insurance this week confirmed plans to roll out the use of voice risk analysis (VRA) software on its home insurance claims.

The company said the software from Digilog, which can help identify potentially false or exaggerated claims, had been successfully tested in a pilot — held at the end of last year — and is expected to be fully implemented by the end of 2004.

In a statement the company said the VRA system takes less than half the time of traditional screening methods and will also allow genuine claims to be paid at the first point of contact without the need to visit the property — meaning that the claims and settlement process can be made substantially quicker for genuine claimants. Larger, more complicated claims will still benefit from a personal claims consultant to support the customer through the process, HBOS GI said.

The company's statement said: "Voice risk analysis works by identifying changes in the frequency, pace and pitch of the claimant’s voice and by analysing answers to a questionnaire designed to pick up signs of undue stress as a result of hiding the truth. The tests will still be used in conjunction with other information sources available within the industry for detecting fraud and with traditional interviewing techniques. It will also take into account levels of distress that may already be present as the result of the incident leading to the claim, such as the loss of valued or expensive items.

"Customers will always be advised that their claim will be monitored using voice stress analysis on two separate occasions before the claims process begins. Customers can always 'opt out' of the analysis should they wish.

"The pilot VRA trials indicated that in certain categories as many as 30% of all claims were worthy of further review. Upon further investigation over 40% of the claims that underwent further review were subsequently withdrawn by the claimant, repudiated or resulted in a detailed fraud enquiry, which supports the findings by the Association of British Insurers." The company added that the trials also indicated that the highest incidences of ‘high risk’ or questionable claims are for accidental loss, theft or accidental damage claims.

Howard Posner, CEO HBOS GI, said: “We know that the vast majority of our customers are honest and those policyholders who have genuine claims have no cause for concern. Our primary intention is to use the VRA, in conjunction with standard interview techniques, in order to enable us to identify genuine claims and settle them more quickly. Claims which are screened as genuine will then be ‘fast-tracked’, so for two thirds of customers we can proceed with settling their claim immediately.

"It is totally inappropriate that honest customers pay for the small number of dishonest ones. If the number of fraudulent claims can be reduced this will also help to keep premium levels low in the future for our honest customers.”