Further to our article1 last week on the publication earlier this year of the Insurance Fraud Taskforce’s final report, we focus this week on the report’s handling of price-comparison websites.
The report singles out price-comparison websites as not sharing intelligence with insurers on suspicious consumer behaviour as effectively as they could, especially given their unique position to detect fraud at the application stage. The report suggests that by sharing data more effectively and taking a more robust approach to fraud prevention, such websites could stop fraudulent applications before they were ever completed.
It is made clear in the report, however, that the manipulation of application details to achieve a cheaper quote can in many cases be part of legitimate efforts to compare insurance quotes, but it is suggested further that these websites could do more to monitor any tell-tale signs of application fraud. With undetected fraud estimated to cost the British economy £2 billion per year, and this costing policyholders approximately £50 each per year, the report nevertheless emphasises that “overall responsibility for spotting and preventing fraudulent applications ultimately rests with insurers”.
Interestingly, this publication follows the end of the FCA’s “Call for Inputs” from insurers on their use of “Big Data”, which sought views on how insurers analyse and utilise information about consumers (and which we reported on in December 20152). No results of this review have yet been published, but we look forward to comparing any such results with the recommendations from the Insurance Fraud Taskforce for the insurance industry to share more data and to keep fraud databases updated.