Spotlight: From siloed fraud teams to shared intelligence

The utopian vision would be to have the strongest possible fraud-prevention tool that prevents any fraud coming into the business. But it is very difficult to account for opportunistic and third-party fraud, however strong the controls are.

“This is why it should not be a binary choice whether your fraud-fighting efforts are focused at the front end or at claims stage. You need to have an end-to-end view and not through a policy or claims lens,” Pete Ward, head of claims counter-fraud at Aviva, argues.

Centralised models

While some insurers take a decentralised approach to fighting fraud, with fraud specialists embedded within key departments, many have moved to a centralised team structure.

Markerstudy’s centralised counter fraud team is made up of investigators, intelligence and data analysts who sit across application and claims. “This complete view of fraud risk helps us take learnings from across all stages of policy and claims so we can feed them back into our front-end controls. A centralised team also encourages knowledge transfer across different roles and creates greater career opportunities,” Markerstudy’s head of fraud, Clare Lunn, says.

Meanwhile, Ageas brought its fraud teams together into one fraud centre about 18 months ago. Katie Davies, director of underwriting services and fraud, says: “Our head of fraud sits across both teams, giving us a joined-up fraud strategy and data sources, meaning we can focus equally on both application and claims fraud. You want to stop as much fraud coming in the door as possible, but you will still see opportunistic and third-party fraud at claims stage.”

This complete view of fraud risk helps us take learnings from across all stages of policy and claims so we can feed them back into our front-end controls. A centralised team also encourages knowledge transfer across different roles and creates greater career opportunities.

Clare Lunn, Markerstudy

“Another benefit is if we build a new model, or get a new data set or tool, we can then use it across both application and claims, so maximise our investment.”

Allianz also takes a centralised approach to fraud management. “We make sure that the right people that need access to data intelligence can and capabilities exist, but in terms of managing the fraud strategy and managing fraud by and large, we have a centralised model,” Ben Fletcher, director of fraud and financial crime at Allianz, says.

Whether the policy and fraud teams sit separately or are part of one reporting line, strong collaboration is key, otherwise silos can form.

At Aviva, fraud experts sit within both underwriting and claims functions. “In claims we have an intelligence unit which helps shape strategy, but there are strong feedback loops and collaboration between our claims and underwriting and counter fraud teams. And we share analytics and data models across the board,” Ward explains.

“I think where you get everybody buying into that strategy and understanding that having strong fraud controls ultimately leads to good customer outcomes, everyone gets behind it and that obviates the risk of disharmony.”

Training and awareness

By more effectively helping people understand what fraud risks they face in their roles, the more we talk about what fraudsters are doing and how they circumvent controls and systems, the more we will break down silos.

Adele Sumner, Intact

 

Intact Insurance’s head of fraud, Adele Sumner, believes it’s a case of raising fraud awareness. “Teams will always have their own priorities and objectives whatever part of the business they are in. But by more effectively helping people understand what fraud risks they face in their roles, the more we talk about what fraudsters are doing and how they circumvent controls and systems, the more we will break down silos.”

Allianz emphasises training. “Technology is important, but our front-line people still have a crucial role to play. We make sure our front-line teams have awareness training and support to help identify fraud,” Fletcher explained.

Skillset requirements have changed. Investigators today need almost a data and analytical approach to investigations and capability as well as historic broad investigation skills.

“My concern is, how do we attract and retain talented people to work in our industry and see it as a long-term career choice? There is a real risk that we don’t have enough talent staying in our sector and we don’t keep up with the fraudsters,” fears Markerstudy’s Lunn.

Sumner thinks it would help the industry to have a professional qualification and training mechanism for insurance fraud investigators. Also, that they should help train brokers to power up technical skills right across the industry.

In-house data science capabilities

Many insurers have invested in in-house data science capabilities that work across the business. For instance, Ageas has a data science team that works closely with its fraud team, looking at trying new things, building new models and refining existing ones.

One Call’s chief technology officer, Josh Barnsdale says: “We have built and developed our own platforms so we can have a unified approach in terms of how we interact with each other across the group. By being very collaborative and understanding what’s happening across different parts of the business, we can then close the gap and assist where possible.”

Using Gen AI in intelligence gathering can help introduce more consistency. “What Gen AI ultimately does is it introduces a consistency of method and is an aid to support our front-line teams. The flip side – and what we are heavily focused on – is we are alive to how fraudsters are going to be looking to use AI in support of fraudulent claims,” Aviva’s Ward explains.

We have huge amounts of rich conceptual data from multiple different industries, such as banking and e-commence, which could be used rather than insurers taking a siloed approach of just looking at insurance fraud.

Paul Brockway, LexisNexis Risk Solutions

Intelligence-sharing

Many would welcome more industry-wide data-sharing and behavioural use cases since fraud tends to move around the industry.

The Insurance Fraud Bureau will be launching a ‘unified fraud technology platform,’ which will integrate insurance fraud datasets into one database. Another helpful development is the IFB’s upcoming broadening of its membership to allow businesses outside general insurance to join the organisation and share intelligence.

The next frontier is sharing data across industries, not just within insurance. LexisNexis Risk Solutions is among those enabling insurers to tap into intelligence from sectors such as banking and e-commerce, helping them spot patterns that might otherwise stay hidden.

Paul Brockway, LexisNexis Risk Solutions director of insurance and investments, says: “The market talks about collaboration quite a lot, but doesn’t talk about cross-network or cross-industry collaboration. We have huge amounts of rich, conceptual data from multiple different industries, such as banking and e-commence, that could be used rather than insurers taking a siloed approach of just looking at insurance fraud.”

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