Industry must use tools at its disposal to deter insurance fraud – Carpenters Group

During the most recent Fraud Charter gathering on 27 March 2025, education was very much a central theme within the discussion.

One particular issue that piqued my interest was whether insurers do enough to educate or – for want of a better word – deter those who seek to commit scams in the first instance.

It is no secret that the insurance industry faces a persistent challenge in combating fraud. I have previously written, for example, about the frightening pace of artificial intelligence (AI) and the criminal community’s eagerness to utilise this technology.

With such powerful tools now readily available, there seems to be a significant challenge for the insurance sector in creating an environment where would be fraudsters are put off by the risk of getting caught – to such an extent that it outweighs the benefit of committing fraud in first place.

So, what are insurers and the authorities doing to meet this challenge?

At last month’s event, we heard from Nik Jethwa – newly installed to lead the City of London Police’s Insurance Fraud Enforcement Department (Ifed) – who outlined his vision of empowering the force to drive forward convictions and dissuade criminals from committing offences.

Jethwa talked about some of the powers at Ifed’s disposal – not just in terms of the ability to arrest, but also powers aimed at curtailing the activity of criminals. For example, the use of cease and desist orders, website takedowns and serious crime prevention orders. Even a simple knock on the door from a police officer was reported as being enough to stop a would be fraudster in their tracks.

While these measures are obviously powerful weapons in the fight against fraud, there was a general consensus among delegates that all stakeholders have their part to play – be that insurers, brokers, solicitors or law enforcement agencies – in seeking to deter individuals who may think of making a fraudulent claim.

Although insurance companies do not wield police-like power, Ursula Jallow, executive director at the Insurance Fraud Bureau, was keen to stress that there are still steps these businesses can take to tackle fraud.

These ranged from targeted marketing campaigns about convictions in the national media to the use of the Insurance Fraud Register, which can physically affect an individual’s ability to obtain insurance and credit.

This reminded me of a historic case where, following a fraudster being found to have been dishonest, journalists from his local newspaper were approached with the intention of running an article locally to name and shame him.

This might seem like a draconian step, but fraud is not the victimless crime that it is often perceived to be – it is the honest policyholder that ultimately foots the bill.