• Koyal Group Training Services, Insurance fraud tipped to rise amid tough economic conditions

    Communication, Communication Design

    Of the 2000 consumers polled, 67% of respondents said economic conditions will make people more likely to be less than truthful on an insurance application. However, 87% said they have never at any point committed insurance fraud by being less than truthful on an insurance claim.

    The research showed there is a generational distinction in perceptions of what constitutes fraudulent behaviour with 19% of respondents aged between 25 and 34 years of age claiming it was slightly acceptable to over-estimate the value of goods that have been stolen or increase the cost of repairs, when making an insurance claim compared to only 7% of 55 year-olds.

    The consequences of fraudulent behaviour - even just exaggerating a claim slightly - were acknowledged by nearly half of respondents, with 48% believing an insurance company will take legal action if a person is found to have lied on an insurance claim. More than half (54%) believe it will be reported to the police as fraud and 60% said the person would stop receiving insurance cover.

    The results of the You Gov survey formed part of Equifax's white paper, entitled ‘What do Consumers Really Think About Fraud?', which included contributions from Mike Levi, professor of criminology at Cardiff University, Stratos Gatzouris, member of Hill Dickinson's counter-fraud group and chairman of the fraud special interest group with the Forum of Insurance Lawyers, and Anne Green, head of fraud management and strategy at Aviva.

    John Marsden, identity and fraud expert at Equifax, said: "As well as the current economic climate continuing to put pressure on consumers, it seems that the financial crisis has changed consumer attitudes to big business, perhaps making it more acceptable to be less than truthful to get a better deal or pay-out. We believe this could be contributing to the rise in fraud compared to pre-recession levels

    "The ever-changing landscape of fraud means that insurers need to examine their own practices, looking at data in a different way and using it intelligently to make a cultural shift on fraud prevention. It is a big gamble for businesses to adopt a different approach by tackling fraud at the front end of customer acquisition or engagement. But industry fraud figures at our roundtable agreed that change needs to happen, and happen soon."

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