New Fraudulent claim every 5 minutes - Can Telephone interviews ever be the solution?
In an age of technological and societal changes which are so fast, it could only be compared to the speed of the industrial revolution, it seems peculiar that so many insurers have embraced a trend for ‘field’ investigations to effectively be conducted by telephone.
Over the past two years several supplier ‘investigation’ companies are noted to have taken to offering a telephone-based service, when there is no obviously understandable reason to do so.
Of course, unless you have been residing under a rock for the past two years, everyone is acutely aware of the impacts of the Covid pandemic and how it has changed the world. One obvious example is the more flexible approach to office and home working that a large number of companies across the UK have adopted. While this was a societal change to the way we navigate the working week in a pandemic, in my opinion, it is likely to be something that has been building for a number of years, with staff naturally seeking to have a better work life balance; the kind that technology experts on yesteryear TV programmes like, Tomorrows World, always promised us would happen, with the dawn of the tech revolution.
This ‘work from home’ effect appears to have changed the mindset of many investigators, or their employers, to the extent that they are now seemingly comfortable with sitting at home from 9-5 making calls, when traditionally the role is field based.
Our primary concern with the apparent shift to telephone-based investigations is that it is simply not sufficient for most, if not all, types of claims. The lack of visibility of the interviewee (lets use policyholder for the purpose of our examples) could be an immediate issue. Does the Policyholder know who they are talking to? Have they seen ID? Are they comfortable giving their sensitive personal details to someone they can’t see, or believe who they say they are representing? Moreover, does the investigator know who they are really talking to? Do they know who else is sat with the policyholder, given they cannot see them; Potentially feeding them with appropriate answers to the interviewer’s questions? The list of obvious red flags goes on and on.
In a time of rising unemployment (There were 32.51 million people in employment in August-October 2021, compared to 33.01 million in January-March 2020 – [Pre-lockdown] (1)) there is a growing belief that fraudulent insurance claims will rise over the coming 12-24 months. This is not unfounded as experience shows us that there is always a measurable rise in fraud when economic hardship ensues.
To potentially compound the problem further, there is a prediction that unemployment is set for a further rise now the Coronavirus Job Retention Scheme (CJRS) has ended (2).
Fraud is a major consideration, when dealing with any claim. Liability claims can often present initially as genuine but transpire to have been fraudulent from the outset but remained undetected until much later in the claim cycle.
The ABI regularly publish their claims fraud statistics and the key findings of the most recent ABI reports:
Of course, these figures reflect a pandemic year which will have obvious impacts, such as the reduced number of vehicles on the roads and people travelling generally.
So, what happens now that the pandemic is showing many of the signs of retreat, particularly as we head towards spring and summer??Vehicle numbers look to be largely back to normal. If, like me, you have tried to drive into a major city of late, you may have noticed how busy the roads are compared to a year ago. Likewise, overseas travel also appears to be on the up; according to a recent news article International travel is experiencing a boost and slowly returning to pre-pandemic levels (3).
If fraud starts to rise and telephone interviews continue to be the mainstay, what happens? There is the obvious potential not only for fraudulent claims to be missed, but also liability and indemnity issues, which arise from a largely ineffective evidence gathering process.
You've probably guessed by now that we never conduct an interview by telephone - but not only do we conduct all interviews in person, we also screen every case pre-interview, in order to know who and what we are dealing with. This creates a 'heads-up' for our investigators, which allows them to specifically target questions around the information identified, in combination with our clients instructions. Our experience shows that this extra level of scrutiny adds significantly to claims savings.
Our statistics show that even a % of liability instructions received, can get flagged as medium / high risk. Once these claims are highlighted to the client, 10% typically convert to a fraud investigation of which 100% are positively influenced aiding significantly reduced payments or claims declined in their entirety.
Pre-interview Fraud Risk Screening:
A key advantage of a face-to-face meeting is that the policyholder is satisfied that you are who you say you are and are also happy to provide personal information. The fact that the investigator can see the policyholders face, any disabilities they may have and need catering for, obtain photo ID, check the driving licence for any endorsements, and address any and all issues at that time.
It is also of benefit to assess the policyholder’s environment and / or if anyone else is present for the meeting (and who might want to influence it). Any or all of these elements can be a good early indicator of something untoward about the claim presented.
In addition, the ability to sit with the policyholder and show diagrams, maps and documents throughout the interview adds to the flow of the meeting, ensuring a relaxed and professional environment. This can also allow them to consider and make reference to any material used in the meeting.
This is of great benefit not only to clients, in terms of evidential value, but to policyholders as well. For example, a policyholder can often draw the scene of an incident much better than they can describe it verbally, further aiding the acquisition of quality evidence, which can either support or undermine a claim.
Irrespective of whether the claim is Motor or Home, liability or fraud, knowing whether the policyholder is truthful and reliable, as opposed to the opposite, is a key test in any claims process. In its most basic terms, insurers ultimately want to know who is paying, and how much.
To some, telephone interviewing may appear to be a way to allow low-skilled or no-skilled individuals the opportunity to conduct fast and cheap interviews, using a script or pre-prepared questions. That may seem reasonable for cases that require nothing more than a light touch. But what about the claims where there is a dispute on liability, causation, indemnity issues, suspected fraud, or simply to know-your-customer?
Claims investigation requires an experienced hand; Someone who knows how to manage both the interview process and the interviewee is, in my opinion, always required. We would never condone interviews being undertaken by a novice with a list of simplistic questions, over a telephone.
In my view, it is paramount that your chosen investigator has the necessary skills and experience to conduct a thorough and professional interview, with TCF in mind and representing their clients brand with the utmost care. It goes without saying that they should also know when they are being provided with false information, understand the technicalities of indemnity, and identify potential breaches of policy conditions, while the policyholder is physically present, and not simply on the end of the line.
Meeting all of this criterion is the key to successfully obtaining evidence that informs the insurer and / or their solicitors of the facts of the case and provides them with a solid evidential foundation to progress the claim to an appropriate and satisfactory conclusion.
David Booker M.A
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References:
?1 ONS, Labour market overview, UK, 12 October 2020
2 HM Treasury, Forecasts for the UK economy publication, 15 December 2021