Big Data prompts fraudulent insurance claims crack-down
Insurance technology specialist Aquarium Software predicts that cheaper pet and other general insurance lies around the corner for the vast majority of honest policy-holders, thanks to Big Data starting to have a positive impact on fraudulent insurance claims. Aquarium’s expert insight comes in the wake of news that attempts to clamp down on fraudulent claims in the UK are now proving successful – having already diminished by around 5% over the last two years.
Fraudulent insurance claims are arguably the biggest problem facing the insurance industry, costing £1.32 billion in one year alone. However, industry figures have shown that insurers are currently preventing 2,400 fraudulent claims a week, which accounts for a whopping £25 million in insurance claims. This depletion of fraudsters is down to the work of the Insurance Fraud Bureau (IFB) and Insurance Fraud Enforcement Department (IFED), and has led to a deduction in claims of 5% from 2015 to 2016.
“New research suggesting a successful clamp down on fraudulent insurance claims is excellent news for both the insurance companies and their customers,” says Aquarium Director, Mark Colonnese. “Indeed, on average an extra £50 is added to an annual insurance bill every week for UK policy holders, due to fraudulent claims such as these. With the number of claims reducing, customers can ultimately hope to see the cost of their insurance premiums do the same. This success in clamping down on fraudsters is undoubtedly due in part to advances in Big Data aggregation and algorithms to prevent and detect fraudulent activity.”
Although fraudulent insurance claims are falling, fraudsters are not disappearing completely, but moving on to different areas such as bogus liability claims. “Although there is still much work to be done on clamping down on these criminals, this is great step in the right direction,” added Mark. “Fraudulent claims can hopefully be almost eliminated, once the full power of Big Data is unleashed in years to come,” Colonnese concluded.