Fraud increases for 71% of P&C firms

More than 70% of European property and casualty insurance companies have faced a rise in fraudulent claims over the past three years, an Accenture survey has shown.

Bogus claims have increased on average by 10% over the period, according to the survey of claims executives at more than three dozen P&C insurers across Europe.

Nearly 40% of claims executives believe that some 5-10% of claims that were paid out by their organisations over the past year were actually fraudulent, but went undetected, the survey found.

Accenture property and casualty insurance services managing director for Europe, Africa and Latin America Thomas D Meyer said: “We estimate that annual losses related to fraudulent claims could be in the range of €8bn to €12bn for the European P&C insurance industry.

“European insurers could save billions each year if they had appropriate fraud-detection tools in place. However, many insurers still depend on ageing technology and insufficiently sophisticated analytics tools, which do not enable them to effectively detect fraud.”

The survey found that European insurers plan to spend €16m on average over the next three years on enhancements to their claims management function.

The top three investment priorities are process optimisation and automation, which were cited by 79% of respondents; analytics and fraud-detection capabilities, cited by 60%; and document and work-flow capabilities, cited by 45%.

The concerns about existing claims systems cited by the largest numbers of claims managers were:

·        84% were concerned about inflexible and out-of-date systems

·        55% said their core claims systems were at least 10 years old

·        51% said their claims systems could not handle the growing volume of data needed for claims management

·        47% said the systems did not allow changes without intervention by the IT department

·        40% said they relied on more than five different applications to manage claims.

Accenture insurance management consulting managing director in Europe, Africa and Latin America Jean-Francois Gasc said: “The challenge for insurers is to be able to detect fraudulent or inflated claims while processing legitimate claims efficiently and fairly.

“A modern core claims system is essential to achieving these objectives, by enabling further automation of certain claims processes to accelerate claims settlement time, for instance.”