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Donna Scully, Director in Carpenters Group, guest blogs ahead of the ABI Protecting consumers event:

(All guest blogs represent the views of the individual and do not necessarily represent the views of the ABI or its membership.)

Huge advances have been made in combatting insurance fraud in recent years, supported by political commitment, industry investment and technological advances. The insurance industry, led by the Insurance Fraud Bureau, and working alongside state institutions such as the Insurance Fraud Enforcement Department, should rightly be proud of its achievements in combating fraud. That is why it is a genuine pleasure to be asked to join an esteemed panel at the ABI’s 2018 Fraud Conference to talk about the regulatory and legislative challenges and opportunities in tackling fraud.

As the theme of the conference on 27th September 2018 clearly states, these advances have only been made possible through a successful partnership between industry, government, regulators and others. It is only through continued collaboration that more can be done to counter the continuing scourge of fraud – and there still remains a great deal more to do. Further fraud and ID checks and verifying legitimate claims. Better sharing of intelligence, information and data. Presenting a unified front to change cultural perceptions that fraud is a victimless crime. Provisions to tackle abuse in medical reporting and rehabilitation. Action to limit the market in data mining. Action to address extortionate credit hire claims and increasing issues in relation to credit repair and total loss claims. A comprehensive and affordable new regulatory system for claims management companies. Taking forward and developing the assorted recommendations of the Insurance Fraud Taskforce.

Driving the anti-fraud agenda forward will continue to require government and industry commitment and drive. Regrettably, the Government’s commitment to this agenda is at risk of looking decidedly lukewarm. Three years after having first been muted, we have yet to see sight of the Part 2 of the whiplash reform agenda, which supposedly will tackle some of the wider, and arguably more politically sensitive, areas of possible fraud. Two years down the line from publication of the final report from the Insurance Fraud Taskforce, the capability to drive home the outstanding recommendations and keep abreast of new developments, is suffering from a lack of government resource to set up the proposed legacy vehicle.

Worst of all, the Government’s proposed whiplash reforms are leading down a path that will likely lead to more, not less fraud. Possible gains in fighting fraud by integrating various existing systems and databases within the new LIP Portal, will be outweighed by the negative consequences from opening up the market directly to CMCs. Fraud will increase, the role of bad claims farmers will grow and any money savings will likely be lost.

Fighting fraud should be the driving force behind regulatory and legislative change in the sector. Unfortunately, it has become a secondary goal behind the pursuit of cost savings, at the expense of fairness for premium paying customers and independent legal representation. Accident claims will not simply disappear under the current whiplash reforms. Instead, genuine customers will demand action and support and then the cost savings start to look increasingly over-stated.

Is it really worth threatening the advances in fraud prevention that the sector has made? Pushing out lawyers in favour of CMCs may appear superficially attractive, but I seriously doubt whether the industry will be better off after it all. Replacing one set of problems with an even worse set is not a sensible or desirable solution in my book.

Book your place at Protecting consumers - cracking down on insurance fraud through collaboration and innovation 2018 here. 

Last updated 24/09/2018