Fraud detection plan

The last 10 years have been defined by increasingly sophisticated fraud and more advanced methods for tackling it.

A great deal has been achieved during this time, but in order to make continued progress in terms of detection over the next decade, it is important that we start to look more widely and commit resources to different areas.

So far, for example, the industry's focus for fraud has without doubt been on motor insurance, and some significant successes have been realised. As we move into the next decade, it is crucial that we start to put just as much effort into areas such as household, healthcare, travel, and in the current atmosphere, financial protection and creditor insurance fraud.

In addition to widening the scope, there also needs to be more attention on fraud at the underwriting stage. A challenging brief indeed, but by identifying risks before they turn into problems, I am confident that some real headway can be made.

Brokers can really assist here. Insurers are starting to plug the prevention gaps on directly sold business, and they need to apply the same methodology to intermediary written business. I see considerable scope for intermediaries to become more sophisticated, and effectively act as a gatekeeper to prevent those potentially problematic risks making it through the door in the first place.

Collaboration is the key; it is vital. As an industry we now investigate fraud by tracking a far broader range of data than we did even five years ago. This includes bank accounts, telephone numbers, IP and email addresses. Data sharing has improved dramatically across the financial services sector, though more could still be done. It is also important that we replicate this progress and improve collaboration outside financial services, for example with internet service providers and telecom companies.

The industry is experiencing a step change in insurance fraud complexity. Career fraudsters now have the skills, knowledge and resources to really put insurers to the test, and they are actively looking to exploit any weaknesses they find. The need for a more joined-up approach to tackling fraud is more relevant than ever before. A great deal has been achieved in recent years, however, and by working effectively and addressing at least some of these priority areas, I'm certain that significant progress can be made.

- James Heath, Partner, Keoghs.