Allianz urges industry effort on fraud after 65% casualty surge

Allianz is calling on insurers to join forces to fight an explosion in employers’ and public liability fraud.

Allianz wants insurers to increase funding to the Insurance Fraud Bureau (IFB) to fight criminal networks that are exploiting soft targets. The plea comes after a specialist team of claims handlers, set up three months ago to focus on public liability and employers’ liability, discovered a huge degree of fraud. Fraud manager Mihir Pandya says his operation’s discoveries resulted in a 65% uplift in detection of fraudulent casualty claims. He believes the team’s work will save Allianz £10m this year.

Panya, also an IFB board member, said: “The fact that we have seen such an uplift tells me this needs to be dealt with on an industry basis. The industry needs to emulate the success we’ve had. It should also look at extra capacity for the IFB in terms of investment. The IFB has the infrastructure to deal with this type of fraud.”

Pandya believes employers’ and public liability fraud will make up 30% of all fraud this year – a figure that is likely to rise to around 50% next year following the team’s discoveries. Latest figures from the ABI show that fraudulent claims rose by 14% last year to £840m.

Pandya said: “These are often complex crimes about which little intelligence exists and where we believe fraudsters think there are easy pickings. The new team will significantly increase our ability to spot fraud in this area, increasing service to our brokers and clients, reducing claims and helping to reduce premiums.

“We are already seeing anecdotal evidence of organised operations appearing in existing fraud hotspots. We urge the rest of the industry to increase their focus on casualty fraud and engage more effective data-sharing methods to stamp out this fraudulent activity.”

Zurich claims fraud and investigations manager Scott Clayton said there was a 13% uplift in new casualty claims for employers’ liability and public liability fraud. He said in principle he supported more resources for the IFB to crack down on fraud within employers’ and public liability.