Insurance Post

Insurance Insight Q+A: Frank Pinder, Global Options


Global Options president Frank Pinder speaks to Francesca Nyman about fraud, special investigative units and the US company’s European ambitions.

What is your strategy for growth in Europe?
Initially it was a matter of supporting our multinational US customers. However, as we looked into the market we realised that there was some opportunity here. Not just in the UK but throughout continental Europe for many reasons.

Global Options recently acquired German investigative firm Axom. What attracted you to the business?
It was chosen partly for its geographical location. But we spent the last year and a half doing robust market due diligence, not only through the vendors that we currently use but also through customers. Lars Skar, our director of international strategies, was the president of the international association of special investigations units, a US and European association, for 10 years and his input has been invaluable.

We did a lot of polling of data from those members to find out which the best companies were in those markets and we've been acquiring those companies to ensure that we have the highest quality response in each market.

Are there significant different between European country markets on tackling fraud?
From a special investigation unit perspective in continental Europe the market leaders are Switzerland and Germany. however, the UK is way ahead of all the European markets overall. It is the leader when it comes to being innovative in fighting insurance fraud. The further away you move from here the less robust it becomes. The Norwegian market is very robust. It has some pretty tight processes and controls. But as you get further into Spain, Italy and Greece and into Eastern Europe it becomes less and less robust.

I haven't seen anywhere in continental Europe where an insurance company is required by law to have an SIU programme in place.

Can the UK learn anything from Europe in terms of counter-fraud strategy?
No, it would be the other way round. A lot of countries can learn something from what the UK is trying to do.

What are the benefits for European insurers of outsourcing fraud
investigative services, rather than handling it within their own claims team?
We have what we call a hybrid model, where we supply the customer with the infrastructure, the staff and resources to fight fraud. It allows them to have a functioning SIU that is within their claims environment, working with their claims teams every day.

With the hybrid model insurers get knowledge of best practices from insurance companies globally, whereas if they build their own cocooned organisation then they only get to learn from their own experience.

There might not be enough claim volume in one particular claims office to justify [the SIU team] being in there 40 hours a week, so they might work set hours.

Another benefit is that we see trends in fraud occurring in one location and we can share those trends in another location and tell our clients what to be on the lookout for. In the European market the insurance fraud will start in one country and one line and can then migrate throughout Europe from country to country.

What are the biggest challenges for tackling fraud?
Recently we held a fraud think tank in Frankfurt and insurers from all over Europe attended. One of the biggest challenges that they brought up was a lack of resources. There just aren't enough trained experienced SIU staff in the European market.

Data sharing is also a challenge. In continental Europe the big challenge is that even the same insurance company can't share information with itself in a multinational environment. An insurance company that writes claims in Germany can't share fraud information with its claims group in France.

The organised fraud groups out there know this. We've seem instances where they've filed one claim with the insurance company in France and filed the exact same claim with the exact same company in Germany, with no consequence, because the two companies can't share data.

Are there any types of fraud that the insurance industry needs to be more vigilant about, in your view?
We don't see a lot of focus on travel insurance programmes. The travel programmes we see in the UK and Europe don't have a robust fraud investigation and identification. When you're talking about injured travellers there has to be a rapid response mechanism. They're too challenging to investigate for most groups.

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