IFB evolution ‘on track’

The evolution of the Insurance Fraud Bureau (IFB) is ‘on track,’ according to the Bureau’s strategy project board Chair, Mihir Pandya.

Following a cross-industry consultation in 2014, the IFB’s new five-year strategy (2015 – 2019) was launched, with two primary areas of development identified:

  1. Evolving the historic IFB focus on organised motor fraud (e.g. ‘crash for cash’ and ‘ghost broker’ scams) to detect cross-industry fraud in other product lines;
  2.  Building the infrastructure and governance required for the insurance industry to share fraud data in a consistent and compliant manner.

A Project Board was formed in January 2015, with the primary objectives to scope potential return on investment (ROI) in evolving the IFB, and expected timescales for delivery. Chaired by Mihir Pandya (fraud manager, Allianz), the Project Board established two work streams to progress thinking around fraud detection in new product lines and cross-industry intelligence management. Both work streams are chaired by senior fraud managers from the insurance industry and supported by subject matter experts from 20+ organisations, including insurers, brokers and industry suppliers.

‘New era of fraud detection’

Mihir Pandya, fraud manager at Allianz & IFB project board chair, said, ‘The IFB is an industry-owned utility, and its evolution is fundamental to the on-going collective fight against fraud. Significant steps have been taken since the future IFB strategy was launched to move the Bureau into this new era of fraud detection.’

Detecting cross-industry fraud

Market analysis led to the identification of liability and property as priority product lines for the IFB to start tackling cross-industry fraud within. Analysis of common modus operandi within other product lines was completed by fraud experts from across the insurance industry, with a set of rules developed to identify the fraud within cross-industry data. A Proof of Concept (PoC) is scheduled to begin in September to test the feasibility of identifying organised fraud networks within the Claims Underwriting Exchange (CUE) data.

Scott Clayton, claims fraud and investigations manager for Zurich and chair of the IFB’s products work stream said, ‘In the IFB, the industry has established a tried and tested model for identifying organised fraud within motor data. We know that the fraudsters targeting our motor books are not product loyal, so it’s absolutely essential we tighten our controls across other key product lines to ensure the fraud threat isn’t simply displaced. The IFB maintains a unique position in assessing cross-industry data – to find patterns and trends of activity that individual insurers could not identify. Results of the PoC will, for the first time, provide the industry with insight as to what ‘organised fraud’ looks like in other product lines.’

Intelligence management

On the cross-industry intelligence management workstream, legal advice from a leading Counsel on the Data Protection Act confirmed the concept of sharing fraud intelligence, subject to the appropriate governance framework being established. A Privacy Impact Assessment (PIA) has been completed working alongside Deloitte to further assess the legal considerations of installing cross-industry intelligence sharing infrastructure.

Work continues to assess intelligence sharing platforms available in the market from a host of suppliers. A PoC will be completed in September with multiple suppliers to assess both the potential value in sharing fraud intelligence across the industry and the effectiveness of potential solutions.

John Beadle, UK counter fraud manager at RSA and chair of the IFB’s intelligence work stream said, ’Intelligence is the lifeblood of any counter-fraud community, yet the insurance industry’s strategy for managing fraud intelligence is fragmented and inefficient. By developing the infrastructure and governance to enable the industry to share intelligence in a consistent and compliant manner, the IFB will also have a unique view of the common trends and future threats affecting insurers, brokers and suppliers.’

On 26 November 2015, the IFB will present a business case to the General Insurance Council, which will identify the potential ROI in evolving the IFB and the timescales/cost of delivery.