Why brokers have a crucial role to play in preventing fraud

Discover how Zurich is clamping down on fraud

According to the Association of British Insurers, around £2 billion in general insurance claims go undetected each year, which adds around £50 to the insurance premium costs of each UK policyholder.

While a recent survey of UK brokers conducted by Zurich found that the vast majority (84%) believed that insurers could do more to help them tackle fraud at the quote stage. Over two-thirds (68%) of the 171 brokers who responded to the Zurich survey thought application fraud was a growing issue, while almost a third (32%) were not currently doing anything to prevent it*.

And as part of an industry-wide drive, Zurich is encouraging brokers to remain vigilant, especially at the point of application.

"We recognise the great work that our brokers already do and we want to help in any way that we can," said Alanda Reynolds, Head of Underwriting Fraud at Zurich.

"We're working with brokers to identify policies that we might want to take a second look at due to missing or possibly inaccurate information."

Once we have identified the policies that need to check, we will look to our brokers to get the information we need to help with the underwriting of that risk.

8 steps to protect your customers

1. Know your customer - Make sure you do a simple identity check for new customers
2. Check your records - Always be sure to check you've not insured them previously
3. Share your expertise - Share best practice with other brokers to reduce fraud
4. Trust your instincts - Common sense checks are key, especially with younger customers
5. Check No Claims Discount (NCD) - Validate NCDs by contacting previous insurers
6. Monitor changes - Make sure no essential details have changed recently
7. Engage your customers - Highlight the risks to customers if information is inaccurate
8. Identify linked policies - Regular reports can help verify customer information

"We do understand that, in many instances, there will be genuine reasons for any discrepancy, but we also recognise that in some cases there could be deliberate misrepresentation. This has helped to shape our approach."

Helping hand

Insurance companies and some of the bigger brokers are starting to invest in sophisticated tools that are able to identify links between cases, such as from telephone numbers, email address or device IDs.

However, it is the simple checks and informed and empowered staff that can make the biggest difference. Training staff to spot the warning signs, such as frequent changes to car details or drivers included on the policy or, importantly, payment issues can play a huge part in reducing fraud.

By encouraging staff to trust their instincts, it gives them the confidence to identify customers who may need to be referred.

"We don't want to validate policy details unnecessarily, and so brokers can avoid unnecessary questions by making sure that the information they enter is accurate," added Alanda.

"As the industry works to address the spectre of fraud and misrepresentation, the quality of information entered by brokers is key."

* Zurich's Broker Research Panel was set-up in 2011 and now consists of 269 brokers. 171 brokers responded to the May 2013 omnibus survey, a response rate of 69%.