Allianz saves £50m after anti-fraud investment

Allianz chief executive Andrew Torrance believes investing in staff to combat fraud is the “best investment you can make in your company” after the insurer saved £50m.

Speaking at a presentation of the UK-based insurer’s 2011 results, Torrance estimated that for every £1 invested in training staff £10 worth of fraud was detected.

The company made realised savings from fraud of almost £50m during last year alone.

He said that one in 10 employees in Allianz’s claims department was part of a focused anti-fraud unit compared to one in 30 five years ago.

“The payback that you get in investment in anti-fraud capability can be realised multiple times,” he said.

“Basically it’s a £1 investment to detect £10 of fraud.

“It’s the best investment you can make in your company to invest in people.”

Torrance said that while the fight against fraud had been ramped up year on year with more companies investing in tackling the issue at the claims and underwriting level.

Among the misrepresentations being made were ages, occupations and addresses as some policyholders sought lower premiums than their characteristics merited.

“I think the industry is doing a very substantial amount to tackle fraud,” he said.

“But I think it is one of those things where there is always more that can be done, although I think that the industry during 2010/11 has been pretty active in this area.”

He continued: “I don’t think this as a priority is going to go away. Speaking to my peers they say this is a major financial issue not only for the industry but for their individual organisations.”

In the future he would like to see intermediaries doing more to tackle the issue of fraud, particularly specialist ones who claim they don’t have any fraudulent customers.