Undetected fraud amounts to £500m predicts Pact Global

Claims technology business Pact Global believes the ABI’s September fraud figures could have been underestimated by around 40% - instead of fraudulent claims in 2019 amounting to the ABI’s determined £1.2bn, Pact Global believes the true amount is nearer £1.7bn, with around £500m worth of fraudulent claims going undetected.

Corroborating this view are the results of a recent survey conducted by Pact Global. This found that 10% of respondents would falsify an insurance claim, while 59% admitted that they would commit fraud because they thought they could get away with it. A further 10% of respondents think fraud is a victimless crime.

Mark Seddon, founder and chief executive of Pact Global, said: “Unfortunately, the fraudsters and scam artists are moving much faster than the handler can, using sophisticated technology to bypass ailing systems and mundane manual processes.

“Fraud is something we all have in common, as when one person commits fraud, we all suffer. Our mission is to change that so instead of victimhood, we can all have a positive view of insurance and claims in common instead.”

Data as a solution

Pact Global’s research further found that 34% of respondents would be less likely to falsify a claim if technology was deployed to prevent fraud. Plus, 62% of those polled believed insurance premiums would come down if fraud reduced.

With this in mind, Pact Global plans to launch a new suite of claims analytics, which is currently in beta testing with insurers. This will enhance the business’s existing Fraud and Cognitive Engine to deliver a full suite of data that will analyse on a claim by claim basis and build a ‘neurological network’, to connect similarities between claimants to identify fraud rings globally.

Seddon added: “Our Fraud and Cognitive Engine automates current, manual processes allowing handlers to focus on more complex claims. Now we have delivered a whole suite that connects handlers and fraud analytics teams, meaning they can now fight together against fraudulent claims, rather than the handler reacting to a claim and analysts retrospectively studying them.”

Pact Global won Insurance Times’s Fraud Solution of the Year Award at this year’s Claims Excellence Awards, held virtually in October.