Fighting the fraudsters – how technology aims to cut claims costs

Matt Ware explains how one insurance company is advocating the use of the latest technology to reduce fraud, improve safety and reduce annual premiums for UK motorists.

Insurance fraud is adding an average of £50 to every motorists’ premium in the UK as fake whiplash claims and crash-for-cash scams cost insurers £2.1billion a year.

Honest motorists in fraud hotspots like Manchester, Liverpool and Leeds are paying the price, with Axa the latest insurer to hike premiums in some post codes to unaffordable levels to deter customers.

But could technology be the answer to halt the drain of money from the pockets of law-abiding motorists into the coffers of fraudsters? Specialist insurance broker Adrian Flux looks at five ways motorists and insurers are using technology to fight the fraudsters.

In-car cameras

In-car cameras are growing in popularity, and are an affordable way of recording accidents on video as they happen. Typically costing about £250, they sit on the car’s dashboard and can be used in evidence to quickly prove not only who was at fault in an accident, but also the speed of the vehicle and, crucially, how many occupants are present in the vehicles involved. “Ghost” passengers are an increasing problem for insurers, where claimants invent additional passengers to bump up whiplash claims payouts. This risk is significantly reduced if the accident is caught on camera. What’s more, the cost of the camera will often pay for itself within a year or two, as brokers like Adrian Flux offer up to 15 per cent off premiums where a camera is fitted. Some cameras like the Chillibongo records pictures in high definition.

Telematics

Most people who fit a black box in their car are seduced by the promise of discounted premiums for good driving. But the SmartBox offered by Adrian Flux has a wider remit: in the event of an accident it becomes an in-car telephone providing immediate two-way communication with claims handlers. This not only speeds up the claims process, but provides an instant record of what happened, how many people are involved (including the number of occupants) and allows insurers to speak with the third party at the scene, reducing the opportunity to later fabricate evidence. The telematics device also records location and speed, and if the phone is unanswered following a collision, claims handlers can alert emergency services to the location – potentially helping to save lives.

The SmartBox doesn’t add cost for bad driving, neither does it discount for good driving but records the car’s annual mileage and is ideally suited to motorists of all ages who only drive a few thousands miles a year. The lower the agreed mileage, the lower the premium, with no curfews or expensive additional premiums for driving on busier A-roads, like some telematics systems.

Lie detectors

Technology that analyses phone calls to detect stress in the speaker’s voice is being used to help in the investigation of potentially fraudulent claims. It works by analysing the pitch of callers’ voices when they are asked questions by claims investigators. A suspected lie results in a beep sounding in the operator’s ear who, once alerted, is trained to ask questions that uncover the truth. This technique has also been used successfully by councils to root out suspected benefit fraudsters.

ANPR cameras

Automatic number plate recognition (ANPR) systems can quickly detect if a car is being driven on the road without insurance, still one of the most common frauds on the road. Uninsured drivers cost the industry about £500 million a year, adding £30 to every driver’s premium. Cars identified by ANPR cameras – which are present on roads across the country and in some police vehicles – can be impounded, and the driver prosecuted. But as well as identifying individual vehicles, the cameras can uncover wider scams, such as a conman who was jailed in December for selling fake insurance policies at cheap rates to mostly young drivers in the Midlands. A number of the vehicles covered by the faked documents were picked up by ANPR cameras and he was jailed for two years.

Anti-whiplash seats and improved testing

Both car manufacturers and doctors are working hard to find ways of both preventing whiplash occurring and rooting out false claims. Car-makers including Toyota and Mitsubishi are developing improved seats and head rests that provide extra support to the upper back and help prevent the neck moving backwards in lower speed collisions.

Meanwhile doctors are still exploring MRI technology to detect whiplash, while leading physiotherapist Don Gatherer has devised a “pain detector” after working with F1 driver Mark Webber and seeing the technology used to test the forces drivers face in their cars.

His device uses a computer and 46 different tests to assess the patient’s true condition, making it much more difficult to fake an injury.

Gerry Bucke, general manager of Adrian Flux, the country’s largest specialist insurance broker, said technology was playing an increasingly prominent role in reducing fraud.

“It’s vitally important for the good of the industry and those honest motorists in fraud hotspots that solutions are found, and technology is key in helping to understand very quickly exactly what happens at the scenes of accidents,” he added.

“Reliable information gathered by insurers direct from the scenes of accidents will increasingly help to stamp out fraud, while improving whiplash diagnosis techniques and the support offered by seats in vehicles will help to identify false claims and stop genuine injuries happening in the first place.”

Written for TrafficSafe by Matt Ware of Maze Media.

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