Insurance fraud investigator: more than 1500 suspicious cases come under increased scrutiny every year[Indrek Petter | 07.10.2022 :]
Insurance fraud investigators are keen-eyed experts who don’t miss a thing, whether it’s a case of an ordinary citizen attempting to gain a few hundred euros from an insurer with a petty lie or accidents staged by organised criminal groups running into thousands of euros.
Two insurance companies belonging to the Vienna Insurance Group operating in Estonia have a joint Anti-Fraud unit that prevents and solves insurance fraud cases. The unit deals with more than 1500 suspicious cases a year, around half of which require in-depth investigation. Depending on the insurance situation, more than 100 indicators might need attention, many of which are monitored by modern technology. However, in most cases, human intervention is also necessary. “When it comes to detecting fraud, the instinct of an experienced worker is still the key,” says Indrek Petter, Head of Claims Handling Department of Seesam. “A claims handler with 10 years’ worth of experience can in most cases immediately tell when something’s wrong with a case without the use of technology. In this job, both experience in criminal policing and an impeccable reputation are essential.” He adds that, in general, there is no perfect crime: there will always be certain traces or clues that must be noticed and taken into consideration.
Most frauds are related to vehicle damage
As vehicle insurance accounts for around half of the market volume in Estonia, it is understandable that most of the fraud cases are related to vehicle damage. As one of the most striking examples of organised fraud in recent years, Petter cites a Russian group that staged road accidents in all of the Baltic states and was identified by the Vienna Insurance Group’s insurance fraud team a few years ago. “There were at least five similar incidents at different intersections in Estonia, where the inattentiveness of other road users was exploited, making them deliberately the cause of road accidents,” says Petter. “In staging the accidents, the group used luxury cars and claimed an average of €15,000 in damages in each case, which they tried to recover at all costs by pressuring the insurance staff.”
Other than traffic accidents, fraud attempts dominate in the area of property and travel damage. “There’s a new trend: the emergence of health insurance fraud, which involves a surprisingly large number of falsified documents, while companies offering various related services are also involved in the fraud,” adds Petter.
An otherwise honest person has a lenient attitude towards insurance fraud
Although organised, multi-stakeholder and systemic fraud cases are low in number, they have a higher financial impact. As a rule, such cases involve claims of more than €10,000, as people do not bother to make the effort for smaller claims. “However, there are also organised groups of fraudsters who operate systematically with smaller sums in order to stay under the radar,” says Petter “We’ve handed several of these cases over to the police.”
The lion’s share of the total number of cases, however, is made up of ‘single player’ claims, which generally range from a few hundred to a few thousand euros. The saddest part of Petter’s job is situations where otherwise honest people try to cheat to receive a higher compensation than they are entitled to or get extra compensation for an old claim. “It’s sad because these people don’t steal bread and milk from the shop but are still prepared to cheat an insurance company out of a few hundred euros, risking a criminal penalty at the same time,” says Petter, adding that both activities are still equally fraudulent.
There are also situations where a person may not even be aware of the fraud – for example, when somebody receives double compensation from more than one party. The representative of Seesam gives the example of compensation received for a damaged suitcase from both the airline and the insurance company. Or, for example, if the insurance company has reimbursed the airline tickets and the airline decides to do the same after a while, then the compensation previously paid by the insurance company is not be returned. “People may think that receiving double compensation is lucky, but in reality they are cheating the insurance company,” says Petter.
Insurance fraud can lead to a five-year prison sentence
Penalties for committing insurance fraud start from a fine, but the maximum penalty is up to five years in prison. In Estonia, justice as well as punishment are administered through the judicial system. Therefore, once an insurance company has detected and identified fraud, it will usually make a statement to the police to initiate criminal proceedings. A criminal record also means that a reckless act can restrict you from working in various jobs in the future.
The group who staged road accidents in Estonia, Latvia and Lithuania was brought to trial and four of the perpetrators were sentenced to two and a half years in prison. “We certainly consider the discovery of this group and its expulsion from the Baltic states an important achievement for our team,” says Petter. “Cases that cross national borders are always more complex because there’s no operational possibility to interrogate the individuals and assess the damage yourself.” According to Petter, solving such cases is largely made possible by excellent cooperation with investigators from other countries as well as the increasing support of modern tools and technology.
“In the Seesam Group, a good cross-border and integrated fraud detection system, modern technology and cooperation between investigators helps to catch fraudsters,” says Petter. “Society as a whole could be more aware that insurance fraud is also fraud. After all, the costs will ultimately come out of the pockets of honest people.”