Ghost broking is a growing threat and it is spreading to the commercial environment, Post held a roundtable with senior claims and fraud figures to discuss what the insurance industry should be doing about it
How big is the threat of ghost broking?
David Halstead, UK head of claims fraud, AIG: It’s on the increase and that’s reflected in the fact that the Insurance Fraud Bureau and Insurance Fraud Enforcement Department consider this to be a high-ranking risk. It’s not confined to the UK either. I have some responsibilities for Ireland and we’re seeing evidence of cases.
Simon Roylance, claims crime prevention team manager, LV: It’s a growing problem.We’ve seen a growing trend in people using stolen identities to take out policies.
Stuart Gee, claims manager for counter fraud unit, MS Amlin: We are getting called daily by the police. What we’re seeing is around a driver’s policy - the named driver is completely different to the actual policyholder.
James Burge, fraud manager, Allianz: What we’re starting to see is a shift into the commercial environment.
Who is being targeted now?
Marc Shickell, financial crime manager, Covéa: We’re seeing quite a lot of identity theft, due to the ease with which you can get data and use it to commit fraud. We’ve seen a broad spectrum of people being targeted.
Burge: Look at the amount of data that’s out there at the moment from businesses, directors or Companies House. We’ve had CEOs phoning us up where a completely separate fake business has been set up. We’ve seen the ghost brokers move from our commercial vehicle products straight into the commercial mini products. It’s exactly the same people.
Craig Lawrence, group counter fraud operations manager, Markerstudy: For people who do this, it’s a business. They’ll find whatever way they can to push through. What we do is constantly trying to track that as quickly as we can to keep blocking it out. I don’t think it’s ever going away, it’s just going to change.
What is the real problem area in terms of accessible data for ghost broking fraud?
Shickell: The dark web. You can buy a full line of data for as little as £5. And that will always pass validation, because it is a full line of data and that causes us problems.
Burge: We’ve got a duty to protect our customers’ data, but other industries have data. How they manage that data is important. Data thefts have happened elsewhere outside of our control, but we have to be able to manage it ourselves.
Lawrence: Anecdotally, we hear ghost brokers are taking that data and harvesting it for later use. They’re playing the long game.
Will the General Data Protection Regulation have any effect on ghost broking?
Roylance: We’ve seen examples where the individuals have been entitled to obtain personal information or bank details and ghost brokers then try to use that.
Adele Sumner, head of fraud intelligence and strategic development, RSA: Looking at organised criminals, they generally don’t seem to worry too much about the criminal law. Perhaps they will have the same approach to data protection laws.
At what point do you flag that there has been a problem?
Linda Rees, head of counter fraud, AA: At quote stage. We also work with our broker side of the business, who do device recognition. The combination of the two has virtually eradicated ghost broking for AA.
Sumner: You can do a lot at quote stage, but then when the named driver comes on, it seems to be moving more into a life cycle of a whole policy piece. We need to be more end-to-end and strategic all the way through the life cycle of the whole customer journey.
Is technology helping or hindering ghost broking?
Sumner: We’ve got technology that we’ve used over the years for prevention and detection. Perhaps we need to consider how we could use bots to talk to the ghost broker. We want to nudge policyholders to be more honest with us. Could we use a bot to nudge the ghost brokers to suggest that they may not want to continue?
Burge: Technology is there and it’s helping. It really is bringing those controls round, but the fraudsters are understanding the controls that are being brought in. Fraudsters are moving out of personal lines because they know that commercial is an indirect model.
Is there any level of collaboration between insurers and the rest of the industry?
Rees: We can share via software that we subscribe to. We’re not currently IFB members on our underwriting side. In the 12 years that the IFB’s been functional, it has not properly got to grips with application in all the different underwriting fraud networks. This is something that it is moving forward, but we’re 10 years down the line.
Sumner: I believe we need IFB support. We probably need the Driver and Vehicle Licensing Agency and police and insurers around the table.
Halstead: The IFB has set up a working group focusing on ghost broking. It’s in the fairly early stages, but it will then take on some of that responsibility and start lobbying.
How much of an appetite is there for the prosecution of ghost brokers?
Rees: The police do have an appetite, but it’s a slow process. You end up with one conviction if you’re lucky. Ultimately you’re picking them off one by one, so it’s very slow.
Sumner: Ghost broking has been prosecuted to some scale. The challenge isn’t necessarily the appetite to prosecute. It’s finding the ghost in the first place.
Roylance: Yes, the appetite is there, but so is the challenge.
What areas will ghost brokers hit next?
Halstead: We’re focusing very heavily on motor. There’s potential for those ghost brokers to reach out into other lines of business beyond motor, which is more of a risk if you don’t know of any prior cases.
Ryan: We saw this, but we caught it quickly because we identified the same names being used in motor fraud. They were setting up home policies to use to open a bank account.
Sumner: We have seen it going onto our household accounts. I wouldn’t call it ghost broking. It’s effectively cyber-enabled fraud.
Is ghost broking being used to fund other criminal activities?
Halstead: I’m not so sure that they’re using funding for other criminal activities. But certainly they’re using it to facilitate that type of activity.
Are insurers employing specialists to deal with ghost broking? Has fraud led to changes in how you are recruiting?
Ryan: We do employ criminal specialists in claims, but not otherwise.
Rees: We’re looking at tech companies and what we can do to spot the social fraudster.
What is going to have the biggest impact on ghost broking in the next 12 to 18 months?
Rees: To see how the IFB gets on with getting its teeth into cross-industry data analysis. I’d like to see an analysis, maybe we can even analyse our quote data together, which would make some people very nervous, but ultimately that’s where the action is. It’s all in the back end.
Rebecca Grainger, senior account director, Transunion: Technology and collaboration within technology, both internally across lines and areas of the business and externally between different organisations. Fraudsters are quite clever at stealing identities. However, often some nugget connects them to previous experience.
Gee: Short-term on the commercial side, I don’t see it changing a great deal. There’s a lot to change in that process.