Collaboration vital to combat insurance fraud says industry expert
Published: April 13, 2019
Updated: April 18, 2019
Author: Luke Jones
CATEGORY: Industry News
Insurance fraud is a problem facing consumers, insurance companies, and governments and only a collaborative effort will result in meaningful changes. Industry professionals say insurance companies must work with government regulators and each other to combat the issue.
“As government reflects on the challenges within the auto insurance policy and the prices charged to Ontario drivers, we would reinforce that tackling fraud could lead to meaningful savings to customers,” said Tracy Laughlin, deputy senior vice president of claims, Ontario and Atlantic, with Intact Financial Corporation.
“We are very supportive of a review of the current regulations that would allow more broad sharing of data between insurers for the purpose of detecting and preventing fraud. The current regulations do not allow for that free sharing of data.”
Laughlin released he comments after the Ontario Budget 2019 announcement. In the budget, the provincial government said it would do more to interlink with the Financial Services Regulatory Authority (FSRA) and the new Serious Fraud Office. The aim is to create a new strategy to reduce fraud, which cost Ontario insurers and customers $1.6 billion in 2018.
Among the proposed measures are:
• Anti-fraud initiatives using advanced data analysis and new rules surrounding fraud activity
• Online claims where consumers can see their auto accident benefits
Speaking to Canadian Underwriter, Laughlin explained how insurance companies will increasingly combine their efforts to stop insurance fraud. Evidence of this growing collaboration was evidenced recently by an investigative partnership between Desjardins and Aviva Canada to solve an auto insurance fraud case.
“By reviewing the collective impacts, it allows us to more quickly identify the trends and collective impact,” Laughlin said. “It also allows us to use the knowledge that is available across companies to create strong action plans to deal with these challenges. When companies work in isolation, what tends to happen is that the fraudsters just stop the behaviour with one insurer, which shifts the problem onto the next insurer, rather than solving the problem.”
“We need to work with government to define regulation around how to share information to allow for proper investigation, while respecting privacy laws,” she said.