ABI launches fraud register that will ‘save insurers millions’

The ABI is launching a fraud register that could save insurers millions of pounds by pinpointing tricksters who move from company to company using similar scams.

The register, which will be run by the Insurance Fraud Bureau, is currently being piloted but will be rolled out towards the end of the year.

AXA Fraud risk manager Richard Davies, who is steering the pilot project, said it would save insurers “several million” once it has been in place for three years.

Davies said the 17 insurers that had joined the project would share information to single out scammers.

Davies said: “There is a big gap in our current control structures. We know that opportunistic fraudsters will move from company to company committing similar scams, but until now we have been unable to share that information in a way that allows us to make better-quality decisions about who we are going to cover.”

The register will cover personal and commercial lines, as well as the life and health insurance sectors.

“I anticipate that the majority of the data will initially come from the general insurance sector,” said Davies. “But we have interest and project support from a number of life insurers, which will be supplying us with pilot data.”

He warned that insurers would have to be very careful handling the register, however.

“We have to be confident that only proven fraudsters are getting onto the register,” he said, “because that information could be used to determine some serious decisions made by insurers. We don’t want to exclude any honest customers from getting cover.”

Davies added that building data-sharing relationships with entities outside the insurance sector, including public bodies, to include more cross-sector data in the register was a long-term goal.

“My feeling is that at the moment insurers are in a better place to share data compared with public sector bodies, which may struggle to get agreement from the government to do that,” he said. “But those conversations have started, and we are hoping to make progress within the next couple of years.”

According to the National Fraud Authority, fraud costs the UK economy £38bn per year, with insurance fraud costing £2.1bn.