Scope Investigation Services Say Online Claims Process Increases Fraud Risk

Unfortunately, once again we are talking about insurance fraud, and as Hamish Kerr, Managing Director of New Zealand investigation firm Scope says, “The online claims process increases the risk of fraud”. It’s easier than ever to file an insurance claim using an online form or even a mobile app – but the downside is it’s enabling the ability to facilitate fraud easier, according to Scope Investigation Services. While insurance companies are trying to meet customers’ demands for easier claims filing experiences by developing convenient online forms or mobile apps, Scope believe this is leading to an increase in fraudulent claims behaviour by removing yet another layer of human interaction between insurance companies and their customers, making the opportunity for fraud even easier.

“If you’re making a claim either online or even with an app it’s easy to consider inflating the claim by adding additional claimed property whereas if you were sitting across from an assessor or an investigator giving that same information, it is far harder to do that convincingly - and therefore there is less inclination,” Kerr told Insurance Business. “Insurance companies are spending a lot of money on attracting and enhancing the customer experience, but they haven’t matched that with suitable controls to protect against fraud.”

Kerr said insurers were often up against New Zealand’s long held ‘ACC mentality’ of playing the system and feeling justified as they’d paid their ACC levy. The fallout of the Christchurch earthquakes has also had a noticeable impact. “Anecdotally we were aware of increased levels of fraud occurring in Christchurch post-earthquake, but no insurers would send investigators to the area because they didn’t want to cause potential brand risk to themselves with the stigma of investigating fraudulent behaviour following what was such a huge tragedy,” Kerr said.  “Unless insurance companies get smarter about how they analyse all that incoming data via the new methods to submit claims, they will suffer in the long term,” he said.

 “I’m a major advocate of information sharing and if the public share information about fraudulent activity with the insurer directly it can only be a good thing. ”As an ex-Police detective, Kerr said his company often train claims teams by helping them to sharpen up their information gathering techniques but often encountered claims staff that were afraid of offending their customers with an impertinent question. “Asking questions is an art form and is the single biggest difference between being a good claims handler, assessor or an investigator. So we teach claims teams to ask questions. Asking questions on the phone as opposed to face to face is an entirely different proposition. We teach them about asking open ended questions and using better techniques for gaining information and not being scared to ask.”

For more information on Scope Investigation Services please go to http://www.scope.co.nz .