It seems amazing that the UK Ministry of Justice (MOJ) and all UK Insurance companies do not apply currently available solutions to slash fraudulent whiplash and "crash for cash" claims. Not a 2% reduction in whiplash claims but a 30% per annum plus reduction.
The solution lies in the structured & unstructured data collected on "Claim Notification Forms"- the CNF. All CNFs pass through the MOJ Portal and can therefore be analysed. Not just the names and addresses of claimants, passengers & vehicle registration numbers but the number of occupants and the free-form (unstructured) information rarely if ever accessed and analysed.
The fact is that most fraudulent claims are committed by a minority of drivers through a minority of dubious lawyers/solicitors. It is amazing how many legal entities are physically located near vehicle scrapyards, second-hand car dealers, and dodgy vehicle rental companies.
It is therefore relatively easy to focus on these and filter out bona fide claims.
But it is vital to analyse all claims, not just for one insurance company too do so. Fraudsters play the system by insuring via different carriers. Varying the vehicle registration numbers, names of drivers, names of alleged passengers they exact a high price in racing insurance premiums and criminalising innocent motorists.
Technology is an available solution rather than the expensive option chosen of manually analysing claims, referring to medical experts and slowing down the whole process. No wonder fraudsters can stay one or two steps ahead.
OCR all the CNFs, index and combine unstructured and structured data. Apply business rules (algorithms) to link names of drivers, occupants and legal entities most frequently playing the system. Identify the outliers, the deviations from norm and you'll soon know which claims need more investigation.
Of course, the fraudsters will adapt the claims away from whiplash to other conditions but a combination of technology and professional human cognition can keep abreast of that.
I am sure the large technology vendors can supply the solutions but these will be expensive, slow to deploy and complex. New insurtech solutions from agile solutions providers are the answer. Insurtech solutions with best-of-classembedded analytics.
The only barrier is cultural- it needs civil servants, politicians, the MOJ and insurance companies to realise that they need to digitally transform archaic processes. Act as a joined up industry and joined up government. It need not costs hundreds of millions of pounds. New insurtech vendors will charge by PCN processed or some other cost-effective metric.
It is not just insurance either- I am sure you will find that the people defrauding insurance companies are also frequently those involved in other criminal activity.
Aviva in 2015 recorded more than 3,000 ‘crash for cash’ claimants (where fraudsters deliberately target innocent motorists and cause unavoidable collisions), with one out of every four ‘crash for cash’ claims occurring in Birmingham. However, the insurance giant noted that despite this figure, the number of ‘crash for cash’ claims actually dropped by 2% compared to 2014. Aviva also revealed that the number of ‘staged’ accidents, when fraudsters use two already damaged cars to simulate an accident, fell by 40% compared to the figure recorded in 2014. Aviva continued to say that motor fraud in the UK has an estimated value of around £58 million, with one out of every nine whiplash claims linked in some way to fraud. The insurance giant has revealed that it is currently investigating 4,000 whiplash claims linked to known fraud rings and gangs.