Fraud is costing insurance billions. Drivers who lie on their initial application are 66% more likely to make a claim
Fraud is nothing new, but it continues to be a huge problem for businesses. For example, estimates suggest that the annual cost of fraud to the insurance industry is £1.3 billion in the UK, $2 billion in Australia and $390 million in South Africa.
Much of the fraud in insurance is opportunistic, with a further potential £1.42 billion in lost premiums in the UK due to customers deliberately manipulating data such as their occupation, where their car is stored or the number of motoring convictions when looking for a quote. Those who lie at application stage are considered 66% more likely to then make a claim.
As a result, having solutions in place that can analyse the probability of fraud at the point of sale will provide significant benefits, while ensuring there isn’t a negative impact on genuine customers.
When using SSP’s counter-fraud solution, insurers and intermediaries will be notified in real-time when applicants are suspected of manipulating their data. Businesses can create their own decision rules based on their tolerance to application fraud and make optimum decisions throughout the process.
This enables them to identify the worst customers who are paying substantially inaccurate premiums and presenting a heightened claims exposure, in order to materially improve their business’s performance.