How are we combatting Claims fraud at Aviva?

Our award-winning team* - Pete Ward, Head of Claims Counter Fraud and Rachael Harkins, Head of Strategy, Casualty Claims, recently caught up to discuss how we're combatting fraud at Aviva. They discuss the impact of claims fraud given the recent whiplash reforms, the steps being taken to mitigate the rising costs of fraudulent claims and what Rachael and Pete think the claims fraud landscape will look like over the next 12 months.

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Transcript  for video Aviva claims and counter fraud

PETE WARD: Well, it's great to be chatting to you today, Rachael and what an interesting year it's been!

RACHAEL HARKINS: It certainly has been a busy year, Pete, so it's great to be here today to chat about our experiences, insights, and share that with our broker community. Let me start by asking you what seems like an obvious question, and that is why is it so important that we tackle fraud?

PETE WARD: Well, first and foremost, as a business, we have a commitment to ensuring that the cost of insurance fraud is not passed on to our genuine customers. And that's why the detection and defending of fraud is so important because it allows us to keep premiums as low as possible. I'm also cognisant that we're in the midst of economic uncertainty and the cost of living crisis and history indicates that there's often a correlation between times of economic hardship and a rise in fraud.

PETE WARD: So in the last 12 months, we've invested significantly in terms of time, but also capital evolving our counter fraud operating model. So we're best placed in order to achieve our ambition of having market leading counter fraud capability. In the last 12 months, we've seen a significant increase in motor non-injury and property fraud, particularly opportunistic fraud. And by that I mean where there is a genuine claim of some description, but there's such exaggeration that a large part of the claim or all of it is tainted by that exaggeration. The Insurance Fraud Enforcement Department, IFED, they recently reported an 82%* increase in referrals and opportunistic fraud, and that indicates that fraud is rife across all lines of business. And it's absolutely vital that we detect these spurious claims, but also we must not lose sight of the fact that we are here to pay claims, we're just not here to pay fraudulent claims. So that's why I think fraud is so interesting and so topical at the moment.

PETE WARD: But from a bodily injury perspective, Rachael, what are you and your team seeing and have you seen any impact from the whiplash reforms?

RACHAEL HARKINS: Yeah, the reforms have caused a big change in the motor injury market, but it's two and a half years on since the reforms came into effect and there's still quite a lot of uncertainty around the trends and behaviours that we'll see. We have seen a drop in certain types of frauds such as staged and contrived incidents, but conversely, we've seen an increase in exaggeration just like you have and also cost layering. So claims layering is the collusion between enablers involved in a claim such as medical experts, rehab companies and solicitors who work together to increase the cost of the claim through requesting additional medical reports, rehab treatment and injuries. And it's something that existed long before the reforms came into effect, but it's what's keeping our teams most busy at the moment. And the reason for this change has been the implementation of the whiplash tariff with a vast reduction in the damages claimed for injuries to the neck, back, or shoulder. We're seeing an increase in injuries that fall out of that definition.

PETE WARD: And are there any particular cases of interest that you've seen in the last 12 months?

RACHAEL HARKINS: Yeah, let me start by saying that where accidents happen at high speed and there's a lot of movement in the vehicle that injuries over and above whiplash are totally to be expected. But a lot of the claims that we deal with are following quite low speed minor accidents. So for example, bumps in car parks or at traffic lights, and we are seeing an increase in injuries such as banged knees from dashboards, elbows off doors, and even bumped heads on head rests. And I would say that the quality of the medical report supporting some of these injuries also leaves a lot to be desired.

RACHAEL HARKINS: So just to give some examples, we've seen someone claim for an eight month bruised foot following excessive braking, which is bad enough, but worse still, if I tell you that actually he was a front seat passenger. We've also seen a rear seated passenger claim for a bruised knee following impact with a dashboard and a driver claim for a four month bruised calf from apparently striking the seat whilst in a seated position in a minor rear end shunt.

PETE WARD: So some of these claims are laughable, but insurance fraud is not a laughing matter.

RACHAEL HARKINS: No, you're absolutely right, Pete. If we don't control the cost of these claims, then it could pass through to our customers in terms of their premium. So that's why the team are working really hard to spot trends in opponents of concern and try and mitigate as much of these costs as possible. So medical exaggeration is going to keep me really busy in 2024, but looking to next year and beyond, what do you think the fraud landscape will look like? Pete?

PETE WARD: It's a great question. I think the propensity of some individuals to commit insurance fraud doesn't look like it's going to reduce anytime soon. And that's why the investment that we've made in evolving our operating model is so important. We need to evolve and not stand still. So it's crucial that we invest in our people as well as our technology. And on the technology front, there's no question that AI is going to have a profound effect on claims more broadly. And the automation of claims is going to be a challenge. From a fraud detection perspective, we've already seen the sophisticated nature of shallow fakes and deep fakes. So that image and video manipulation, it is becoming more enhanced. What gives me comfort and what I'm optimistic about though, is the technology to detect those deep fakes and shallow fakes will also improve over the next 12 to 18 months.

PETE WARD: And from a policy fraud perspective, I think ghost broking and elaborate misrepresentation is going to continue to evolve, and that's something that we need us and our broker community to remain vigilant around. And whilst we embed and embrace new technology, there will always be an importance for our frontline teams, for our brokers, for our customers, just to remain vigilant when it comes to fraud indicators so we can detect those spurious claims.

PETE WARD: So Rachael, for our brokers and customers who are watching this video, what advice would you give to them that they can help us to not only control claim spend, but also help detect fraud?

RACHAEL HARKINS: Great question, Pete. The earlier we know about a claim or a potential claim, the sooner we can intervene and offer our services for repair, hire, or injury to the third party, which can help control costs. Also, early notification allows us to investigate fraud or liability concerns and protect our customer. And crucially, we're able to detect a potential large loss claim early as possible and direct it to one of our expert claims managers as early in the claims journey as we can.

PETE WARD: I think that's a really important point. Early notification is key. But it's been great chatting to you today, Rachael. Our teams have made a lot of progress in 2023, and I'm sure 2024 will be equally as interesting.



*Source:  IFED April 2023

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*Excellence in Fraud Mitigation Gold Award - Insurance Times Awards 2023.