Insurance Fraud

Understanding an individual's insurance history

People seeking to reduce or minimise their insurance premiums often 'forget' or intentionally misrepresent their previous claims history. Our Insurance Fraud service makes validating claims history easy - both at the point of application and when a claim is lodged.

Insurance Reference Services (IRS) is a member based organisation that aggregates general insurance claims information on individuals across Australia. Its members promote industry wide collaboration in the fight against insurance fraud and misrepresentation. Claims data is used by the insurance industry to validate the disclosures made by applicants and policyholders, helping to ensure policyholders pay the right premium and pricing and risk models are based on accurate information.  

The IRS database holds over 22.7 million insurance claims contributed by the major insurers nationally and is estimated to capture over 98% of the general insurance claims in Australia.

The database holds information on over 11 million individuals and 700,000 organisations. The IRS database holds insurance claims information on an individual or organisation for 10 years and includes:

• Insurance enquiries - footprint left by Insurer on a file at point of underwriting or claim
• Type of insurance - household, motor vehicle, CTP
• Reason for enquiry - claim, Cover Note, New Business, Quotation, Renewal
• Enquiry amount - $ amount related to the enquiry
• Relationship to insured - insured, co-insured, driver, 3rd party, witness
• Enquiry amount - $ amount related to the enquiry
• Amount of claim - $ amount of claim
• Claim type - accidental damage, flood, fire, collision, storm damage, at fault collision, windscreen
• Status - current, withdrawn, ex-gratia, finalised, fraud, declined
• Loss assessor enquiries - similar to an insurance enquiry above, however, added when a loss
• assessor is assessing a claim

 

The information held on the IRS database can be utilised in a variety of cost efficient ways to add value to your underwriting, fraud detection and claims management processes.

 

Prevent premium leakage and rating error

The insurance industry (and their actuaries) has proven that past behaviour is a good indicator of the future - that's why insurance applications ask for previous insurance and driving history.

Good insurance and driving history results in lower premiums. Consumers know this and will often "forget" or deliberately falsify their insurance records, obtaining artificially low premiums as a result. Veda research has shown that nearly 1 in 6 applications for motor insurance contain material disclosure errors.

IRS allows you to automatically flag insurance applicants which show anomalies in the insurance information they provide, allowing you to charge premiums which reflect the real risk. IRS can establish non disclosed insurance history, verify applicant addresses and assess the validity of stated no claim bonus entitlements.

Searches can be undertaken to determine whether it is likely that a young driver resides at an address and whether the young driver has been disclosed as a nominated driver on a policy. The use of IRS is an initial step insurers can take in the correction of rating errors and the recovery of premium leakage.

 

Apply the relevant No Claim Bonus without requiring documentary proof

Many insurance applicants claim the benefit of No Claim Bonus ratings to which they are not entitled, or pay extra premium to maintain their NCB's for life. If your current process is to require proof of an applicant's NCB rating, the process can be expensive and ineffective. Some insurers have no verification process at all and are open to exploitation. A NCB rating is an inefficient proxy for an individual's insurance claim history and should not be used without verification. IRS can assist in this process.

 

Use insurance claim history as a rating factor when this information is not readily available from your own database.

Whilst many insurers use driving and insurance claim history as a rating factor at the inception of a CTP policy,CTP renewal pricing generally takes into account the claim history of the CTP policy in the past year only.

With consumers utilising the internet to quickly compare insurance pricing, it is becoming more common that CTP coverage and comprehensive coverage are not held with the same insurance company.Reference to IRS can provide a policyholder's insurance history when your company does not hold the policyholder's comprehensive vehicle coverage and can be used to provide more efficient and profitable pricing for your CTP portfolio.

 

Determine a claimant's adherence to policy disclosure conditions

Use the IRS database to determine whether your claimant disclosed past insurance history at policy inception in the appropriate manner with a view to adjusting and/or denying submitted claims where your insurance company has been adversely affected.

 

Determine claim fraud indicators from data held on the IRS database

The IRS database holds information on past insurance claims (including declined and withdrawn claims), loss assessor investigations, commercial credit information, and public derogatory information such as bankruptcies and court writs. This information can be used to determine appropriate flags to highlight claims with a higher likelihood of fraudulent behaviour.

 

Verification of insured identity

The IRS database and access to the Veda verification suite of services can verify the identity details submitted by your insurance customers. Identity verification is crucial given the increasing problem of identity theft and the potential impact upon fraud within your portfolio. Veda facilitates access to the White Pages directory, the Electoral Roll in all Australian states and can even match individual details against records held at State Licencing Authorities.