Industry must move on from identifying fraud via ‘particular profiles’ of fraudster

The traditional approach of profiling fraudsters is no longer useful to the counter fraud sector because “the general population has become much more desensitised to fraud”. 

That was according to Laura Horrocks, Laura Horrocks, Shift Technology customer success manager, who spoke the most recent Fraud Charter roundtable (14 May 2024) – hosted by Insurance Times and sponsored by law firm Carpenters Group.

Horrocks added: ”We need to get out of the mindset of there being a particular profile of fraudster – there’s been a sustained increase in exaggerations based on opportunistic fraud, so it’s much more difficult to detect based on previous activity.

“One of the only options that insurers have is trying to protect themselves using and detection tools available in terms of patterns of behaviour, because a fraudster could now be anyone – even high net worth customers.” 

Gross exaggeration

James Burge, head of counter fraud at Allianz, echoed these sentiments and added that the motivation for fraud had transformed from “greed to need” because of the impact of cost of living challenges, with fraud in commercial lines beginning to rear its head. 

He explained: ”This is not just about individuals with watches that we’ve seen in the past, gross exaggeration is now occurring in the major loss space and it is getting worse.

“The occurrence of fake or duped businesses continues to rise and we see that in application fraud at the moment, certainly in the commercial motor and motor trade space.” 

In terms of the solutions to the general population increasingly turning to fraudulent methods, Kellie Lacey, Crawford Legal Services’ head of intelligence and claim insight, said: ”For me, it’s not just the individuals who are bringing the claim who are fraudsters, it’s the key enablers, or the people bringing the claims on their behalf. 

”It’s about taking that next step, even though a lot of insurers are often reluctant to pursue recovery – until we start hurting people in their pockets, they’re not going to stop doing this.”