In this exclusive iPMI Magazine interview, Christopher Knight, CEO, iPMI Magazine sits down with Simon Cook, Head Of Technical Claims, CEGA Group, to discuss one of the leading risks in medical, healthcare and travel insurance markets globally: fraud.
Can you tell us a bit about yourself and your Special Investigations Unit?
Having worked in insurance fraud for over 14 years, I am passionate about the sector.
My career first began back in the 90’s, working for Eagle Star Direct/Zurich as a motor claims negotiator. I progressed to become a senior fraud investigator at TIG /Conversant Data and then joined CEGA in 2008 as Special Investigations Manager. My remit was to set up a new Special Investigations Unit (SIU) to help combat the ever-increasing threat of travel insurance fraud faced by our clients.
Today, this unit has grown to become a global provider of fraud detection and validation services for multi-sector claims; not least travel, household, health, personal accident and hospital benefits. Our specialist services benefit insurers by enabling dishonest claims to be declined: reducing insurers’ losses, while ensuring the fast payment of genuine claims. We also have a dedicated subrogation department to recover our clients’ costs from other sources, such as dual insurers, third parties and airlines.
Based in Chichester and Bournemouth, we work closely with our in-house medical, claims and travel units, and with a worldwide network of investigators, to carry out thousands of investigations a year. We are available as a stand-alone service - where clients manage their own claims and pass instructions to us - or as an integrated service, where we manage the end-to-end claims and assistance customer journey.
Until recently, I was also a director of the Insurance Fraud Investigators Group (IFIG): arranging conferences, speaker line-ups and social events.
You recently announced a partnership with Charles Taylor General Adjusting Services (CTGAS), a division of your parent company. What are the benefits of this?
Partnering with CTGAS in 2017 has enabled us to offer clients seamless loss-adjusting, fraud investigation and end-to-end claims validation services for all types of insurance - all over the world. This has created a range of new business opportunities; most notably in the the aviation, property, casualty and special risks sectors. It has also expanded CTGAS’ own service offering.
Would you like to share some of your other developments over the last two years?
We were delighted to be recognised in the 2018 British Claims Awards, with the Counter Fraud Award. Since then, we have continued to pursue an ambitious growth agenda and added to the team with both internal promotions of existing staff and external recruitment to add to our diverse skill set. We have also been pleased to see that we were responsible for over a third of the ABI’s reported annual travel insurance fraud savings in 2017 (the most recent ABI data available).
On the developmental front, we have been optimising internal fraud controls and processes for our insurer clients, as well as our own claims handlers; to ensure we are one step ahead of fraudsters.
We also constantly invest in our people and give them the opportunity for personal growth - supporting both our own team and CEGA’s wider customer-facing staff with training for professional investigator accreditations and CII exams.
How is fraud detection developing – particularly in the context of automated claims?
Some dishonest claimants may see automated claims as an easy target for fraud. But automation is playing an important part in detecting fraud too. For example, automated reporting systems can detect suspicious activity early in the claims cycle, such as subtle similarities between claims. Efficient data storage enables insurers to spot unusual patterns in or volumes of provider bills, while automated bill auditing enables case details to be scrutinised and cost or treatment discrepancies to be identified.
It’s important for fraud investigators to constantly enhance their processes, and to innovate. But prevention will always be the optimum solution to fraud, which is why insurers are implementing tighter controls at point of policy application, so that customers known to be associated with fraud can be refused cover.
What are the other key components of an effective insurance fraud detection strategy?
A robust Key Fraud Indicator (KFI) checklist, ideally supported by system-driven alerts, will help frontline claims handlers identify fraud at an early stage. Meanwhile, regular fraud awareness training and communication will help educate claims staff about new and existing fraud trends, drive the development of tailored front-end questioning techniques and ensure that genuine claimants are paid quickly.
In the case of medical claims, access to a multi-skilled medical team is crucial to identifying overtreatment or inflated costs in hospitals abroad. The team can talk to patients about their treatment and, where necessary, question the necessity of proposed medical procedures.
For all claims originating overseas, a global network of local investigators ‘on the ground’ is essential. They can visit hospitals, retail outlets and police stations, and interview witnesses (and more) to assess the validity of bills. Seeing an outlet at first hand will often expose a scam quickly, for instance when a shop or hospital doesn’t exist, medical records can’t be produced, or a loss report isn’t recognised by a local police station.
We’re fortunate that our parent company Charles Taylor’s presence in almost 120 locations worldwide gives us access to highly experienced international colleagues. They are able to carry out investigations on our behalf and complement our own extensive global network.
Can you give us some examples of outrageous fraudulent insurance claims?
Insurance fraud can range from adding a few extra items to a genuine claim (to cover the costs of a policy excess), to fabricating an armed robbery. But fraud is becoming increasingly sophisticated; often involving cunningly crafted scams, expertly executed and backed up with reams of supposed evidence.
To give you some examples: one policyholder claimed that he and his wife had received treatment for broken noses when they both fell down a flight of concrete steps abroad. Surprisingly, they had no other injuries. In fact, they had both sought treatment for cosmetic surgery and fabricated the circumstances of the incident to falsely claim these expenses.
This fraud was unearthed when our investigator visited the clinic where the couple claimed to have been treated. It quickly became evident that the clinic didn’t fit the description provided by the policyholder and that it had given the couple pre-cosmetic surgery advice, not essential medical treatment. More interestingly, there was a large caricature of a cosmetic surgery patient on its wall.
Then there was the man who stated that a small bridge had collapsed as he walked over it whilst on holiday, and that he had received extensive medical treatment for his injuries. Our overseas enquiries with locals established that they knew nothing about this alleged incident and that there was only one footbridge in the area, which had never collapsed. Further enquiries at the hospital revealed that the customer had never been admitted for treatment, although he had claimed over £5,000 for medical expenses.
If you’d like to find out more about our investigations, watch us in Series 11 of BBC 1’s Claimed and Shamed: the popular expose of insurance fraudsters. Shown later this year, it’s expected to attract over a million viewers and is a great chance to broadcast the message that fraudulent claims will be found out, wherever they originate in the world.