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New insurance data, analytics & technology combine to make life hard for claims’ cheats

CHEATING holidaymakers and others who make fraudulent claims on their travel, motor and home insurance are now more likely to be caught out – thanks to the latest behavioural analytics technology developed by insurance industry trouble shooter Pact Global.

Insurance sector fraud currently costs around £1.3 BILLION a year in the UK, (Experian, May 2020), with cheats making illegitimate claims to the tune of around 350 claims a day.

But now a survey by insurtech start-up Pact Global has revealed that new ultra tech is likely to deter people from chancing their arm with a fraudulent claim.

For one of the questions in the survey – “if you submitted a claim that used more than 50 data points including weather patterns, traffic info and flight details, would you be less likely to falsify…?”: over a third – 35% – said yes; only 4% said no, while 61% said they would never falsify a claim. Does this suggest that four in ten of the population would consider lying on an insurance claim?

Similarly, when asked, “if you submitted a claim that used facial recognition and behavioural analytics to determine if you were lying would you be less likely to falsify, 34% said yes, 5% said no, and just six in ten (61%) said they would never falsify a claim in the first place.

When asked how much people thought was acceptable to falsify, nearly one in five (17%) said up to 10% was acceptable; 7% said up to 25%, 4% said up to 50%; 5% said up to twice the value of the claim and nearly one in 20, 4%, said ‘the skies the limit’.

With the Association of British Insurers (ABI) reporting that the total amount paid out in travel insurance claims in 2018 was £400 million, even 10% has a significant impact on the industry – and ultimately policy prices for everyone.

Founder and CEO, Mark Seddon, cites an example of how the system stops fraud: “A ’soldier’ claimed to have been deployed for service at short notice and was claiming the full price of his £10,000 holiday to Dubai, which he never got to take. The claim was completely fabricated and supporting documentation had been created in software programmes like Adobe Photoshop, which the insurer was going to pay, until it was run through the Pact platform.

“Our system denied the claim within minutes,” Mark continues.  “The ‘soldier’ did not live at a valid address and so the claim failed the Know Your Customer (KYC) check at the start. Our checks highlighted that the flight details didn’t exist and that the name on the bank account did not match the claimant. Our image recognition discovered the invoices were created in Photoshop using images pulled from various places on the internet. The platform picked up every source of the images that were used in the fake invoice.”

The new technology will not only deter consumers from making bogus claims and protect insurers but will go some way to heading off premium increases for the majority of the public who are honest.

More about the Pact platform:

  • The consumer app uses facial recognition and behavioural analytics to verify the identity of the claimant from the start. Policy cover and limits stored on the app can then be automatically reviewed and the claim validated by using more than 50 separate data points. This includes details of cancelled flights and even the weather if such conditions have a bearing on the claim.
  • The user can upload relevant documents or even video in support of their claim via a smartphone/tablet, and store that information in the event that it is needed again. There is also a ‘Machine Learning Chat Bot’, called ‘Ollie’, which is designed to advise, assist and further simplify the user experience by delivering real time notifications, keeping users informed of how their claim is progressing.
  • Pact delivers all the most important numbers a traveller may need globally, from embassy to medical emergency telephone numbers. In the wake of Coronavirus (Covid-19), it will soon provide tracking of worldwide viral and bacterial epidemics with vaccination information that a traveller may need to know before going on their trip.

Facts at a glance:

  •     Pact uses more than 50 separate data points during the claim validation process to verify the customer’s contact details and investigate their claims history.
  •     Verification is supported by the use of AI, behavioural analytics, assisted intelligence and a purpose-built, face and voice recognition program.
  •     For travel insurance claims specifically, the platform cross-references details like cancellations and delay with transport information (e.g. Flights) and even the weather.

Pact facilitates rapid settlement in up to 26 currencies, so a claim can be settled no matter where you are, with a valuation platform covering over a million products with suggested replacement values, supplier information and trust pilot scores.

Survey carried out in June 2020, including 150 participants