As a society, we are becoming increasingly inter-connected at an extraordinary pace, with driverless cars just round the corner. Adam Gooch, commercial director, Insure Telematics Solutions, argues that the more connected we are, the more successful we are at fighting fraud.
We live in a world where we can live stream each other our locations, order almost anything with next day delivery with our voices, and instruct robotic personal assistants to turn up the heating in our homes.
This world of interconnectivity, which offers great benefit to our everyday lives, relies on huge amounts of communication and data transfer between each device, network, and user.
There is lots of fear mongering surrounding this increasing interconnectivity with warnings of threats to our privacy and personal security. It is rare to see stories highlighting how certain technologies are protect us from dangers such as fraud, something that has a big impact on all of our pockets, whether we are a direct victim or not.
As research by the Centre for Counter Fraud Studies showed, fraud is a phenomenal problem, and costs the UK alone £190 billion (€212.93 billion) every single year: PwC’s 2018 Global Economic Crime and Fraud Survey finds that 49% of global organisations say they’ve experienced economic crime in the past two years. While some fear that being so connected can put us at risk, in reality we can now isolate fraudsters quicker than ever, and tackle the problem head on.
Technology counters fraud
The fact of the matter is that there are now countless emerging technologies that can impact fraud. For example, the introduction of driverless cars will make a huge difference for insurers looking to get a comprehensive and detailed picture of risk.
Further, the sheer amount of people attempting to make fraudulent claims on their car insurance may ultimately be eliminated if driverless cars become the norm. It is hard to lie about the cause of an accident if the driver hasn’t had a significant role to play in its execution.
While we await the rise of autonomous cars, there are still ways to fight the ‘crash for cash’ schemes that cost the UK £336 million (€376.49 million) a year. Telematics has emerged in the last decade as a fail-safe way to detect and prevent fraud on a mass scale. Just like driverless cars, telematics can be used to understand and analyse driving data to help determine when a claimant is lying.
A single recent incident we dealt with could have cost the insurer we were working with up to £40,000 (€44840.06) without our intervention and insights. When a policyholder takes out a ‘blackbox’ insurance policy through which monitors how the car is driven, the insurer can refer to its blackbox provider for data analysis after an accident.
Evidence doesn’t lie
In this instance of fraud, we were able to determine the fact that the policyholder and two of the claimants knew each other, as policyholder’s blackbox showed that the person had visited each of the claimant’s homes in the days before the incident. Also, they had lied about how the collision had occurred. Further data analysis showed that one of the claimants had a history of being involved in an organised crime network or fraud ring.
A blackbox collects driving data, which is, in part, used by the insurer to determine how an accident occurred and can lower premiums too if its evidence shows the policyholder is a safe driver, rather than simply basing the costs on factors such as age or address. The blackbox also works to eliminate fraud, preventing honest drivers from being affected by rising premiums through fraudsters living in their area.
We have long worked on establishing an advanced technological model to ensure the data we collect is incredibly accurate. People are often surprised to hear we worked with Microsoft Azure (see video below) to develop a unique algorithm based on a combination of AI and machine learning. Exciting technology does not always need to be limited to the development of drones and robots.
In the world of insurance, technology is having a steady impact on fraud. Insurers are waking up to the different ways in which we can assess and access information, and are heading up technological developments, rather than shying away from them.
Telematics will be just the tip of the iceberg in terms of how technology will come to fight and eliminate fraud, but for the time being, it is one of the only developments that utilises the potential of the digital age to really make a difference in the war on fraud.
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The author of this blog is Adam Gooch, commercial director, Insure Telematics Solutions
Published on July 31st, 2018