DigiBlog: ‘Keeping mum’, a barrier to consolidating data intel


New fraudulent behaviour emerges every day and while it’s understandable that insurers want to keep their competitive advantage, Lior Koskas, managing director of Digilog UK, believes professionals and governing bodies should share in their expertise. The ways in which the insurance industry handles both sensitive and personal information often come under scrutiny in keeping with the Data Protection Act. Compliance teams are tasked with policing conformity to strict codes and best practices – an activity that will require everyone’s full attention in light of the upcoming General Data Protection Regulation.

Previously, we have touched upon the notion of technological innovation in relation to the tools available to support identification and verification so as to differentiate between the vast majority of genuine customers and those merely trying their luck through means of fraudulent activity. But what about the provision of technology when it comes to consolidating data intelligence?

Legacy systems differ between corporations and these, in conjunction with varying fraud processes, have a bearing on the way in which firms report analytics. Authoritative bodies such as the Insurance Fraud Enforcement Department mean it’s possible to report cases of interest or high-profile fraud, leaving insurers to anticipate how to tackle new and emerging acts of deceptive behaviour. However when considering effective validation and prevention measures, it is important to take into account the 3 Is: integrity, identity and intention.

Here data-matching tools and predictive behavioural analytics come into play, amalgamating claimant profiles so as to determine offending age, postcodes, professions, with emphasis on prevention as opposed to mere detection further down the line. Such activities are undertaken in-house. Yet the results are often shrouded in secrecy and it could further be argued that there are notable grey areas when it comes to those within the counter-fraud profession sharing information obtained from validation and investigative practices. Understandably, insurers strive for their percentage of claims defeated on grounds of fraud or misrepresentation to be more favourable than their closest competitor. Yet withholding key information which led to such results merely sustains a barrier to communication across the industry.

As such, it is essential to consider the way data is used to combat fraud, as well as how information is shared throughout the wider industry. There is naivety in thinking that a fraudster will merely ‘go away’ once they have exhausted one avenue. Experience tells us that they are persistent in exploiting a system built to serve the genuine public and are fluid in moving from one product to another. Hence the need for multi-agency cooperation, working together to share experience and intelligence on a multitude of levels, while highlighting problematic areas, successes and the challenges faced, in a bid to create a hostile environment for the would-be fraudster.

Where possible, it is paramount that professionals and governing bodies alike are willing to share in their expertise, providing powerful insight into new and emerging fraudulent behaviour, particularly where fraudsters use increasingly sophisticated methods in order to replicate or mimic current means of validation. As a result, investment in the appropriate risk analysis tools, coupled with pre-emptive intelligence is the insurance industry’s best line of defence in the fight against fraud.

This article first appeared on Insurance Post