Broker and law firm prevent over 1,000 fraudulent motor claims with ‘cradle-to-grave’ approach

A “cradle-to-grave” approach has seen insurance broker Clegg Gifford and Co and international law firm DAC Beachcroft (DACB) reject more than 1,000 fraudulent motor trade claims amid a shift in fraudster efforts.

In a statement released yesterday (20 June 2023), DACB highlighted that fraudsters were now looking for opportunities across first and third-party claims, as “this is where they maximise more significant, easier and quicker sums” compared to injury, credit hire, bent metal, theft, fire and flood.

“Identifying fraud in motor claims purely based on speeds of vehicles or passenger count has gone,” said Dan Prince, partner at DACB.

“The fraudster’s interests in costs layering, professional enablers, digital document manipulation, shallow or deep faking, ghost brokering, dashcam snipping, day policies and policy hijacking are now commonplace.”

DACB’s claims data showed other risks that the motor insurance sector was now exposed to included thefts of prestigious vehicles and repeated policy purchase attempts.

Dashcam and telematics tampering as well as the cloning of vehicles were also on the list.

Innovation

To mitigate the risk, Prince said that “finding new ways to beat the fraudster is not always about new systems or IT”.

Instead, he said “it can simply be looking at areas that fraudsters are penetrating and developing a strong solution to this”.

He added Clegg Gifford and Co and DACB’s “cradle-to-grave” approach used “innovative identification methods, in-depth data analysis, early investigations and proactive evidence-gathering”.

The result saw them reject more than 1,000 fraudulent motor trade claims over four years since the approach was created.

If not discovered, the fraudulent claims would have cost Clegg Gifford and Co over £7m in compensation payouts.

Graham Lee, counter fraud manager at Clegg Gifford, said: “This is a fantastic example of a close and effective partnership between a managing agent and supplier delivering significant success.

“DACB and CG have developed an innovative and cost-effective solution associated with the validation of fraudulent insurance claims.”