a ceo’s viewpoint. by john eves ba;mbs;fcca;fcila;fuedi-elae managing director, thornton &...
TRANSCRIPT
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A CEO’s Viewpoint.By
John Eves BA;MBS;FCCA;FCILA;Fuedi-ELAEManaging Director, Thornton & Partners
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Joined T&P in 1983 Specialised in BI and “Fidelity” Joined Board in 1989 Managing Partner in mid 90’s Approx 250 people, 10 branches Standard PD, BI, Injury and Desk Specialist companies in Marine,
Engineering,Counter Fraud, Jewellery, Fulfillment
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Three Functional Distinctions Insurance definition suggests fiction or
exaggeration Fidelity Guarantee – e\e fraud, bank &
bonds Transaction Fraud – Stewardship aspect
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We are the Response Team, the Reactors Our actions are governed by the problem
presented Investigative strategy governed by scope of
the problem presented
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Is it old fashioned “proper” adjusting? Is it a reclassification of what we already
do? Is there a standard unit of measurement? When is a fraud not a fraud?
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The difference is one of degree Lawyers present can comment on the
continuum from: Inflated view – overstatement- fraud We all measure fraud differently Is our classification sufficiently robust – no. Where do all these numbers come from?
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Good Adjusting Practice & Management Intake- point alerts at Agent\Insurer\
Adjuster Initial professional assessment, pre
inspection Conversation Management techniques pre\
post visit On-Site work Forensics, PI& MI
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“Fraud is proven when it is shown that a false representation has been made:
knowingly; without belief in it’s truth, or recklessly, careless whether it be true or
false.”(Derry v Peek 1889)
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It didn’t happen Set-up or Contrived Deliberate Genuine peril, but exaggerated Not covered, but made to fit No insurable interest
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Fraudsters exploit simple weaknesses Don’t look for the complex Look for the blindingly obvious Traditional alerts, followed up by diligent
work The answer lies in best practice systems Customer service protocols- a fraudster’s
weapon
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Errant behaviour more often caused by systems, not people
People with malintent exploit those system weaknesses
They don’t often create them In summary, opportunities present
themselves When looking for fraud, try this angle
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What is the mission \ vision of the organisation
How is that manifested in actual behaviour Percolation factor What is the character of the working
environment Is it supportive, fearful, turbulent
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Procedures IT Usage Internet Usage Photographs General PC Access Maintenance and Change Routines Firewalling Management Compliance
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Independent verification Division of Duties Internal Audit Fraud Lines & Registers
All investigation: Service, Cost, Expectation
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The big savings are in prevention, more than absolute detection
Reducing financial crime: an FSA statutory objective
Insurance industry is not the law. We gather facts
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What training do you get\give What protocols are in place to protect e\e’s What do the protocols say about referrals Is it easy or rewarding to refer For those who take the escalation baton: Are you trained in interview techniques Are you aware of DPA constraints How safe are your files and mails
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According to the ABI 10% admitted to their last claim being
fraudulent 50% knew ‘someone’ who has committed ins
fraud 63% are thought to have made honest and
truthful new applications for household, motor and holiday insurance
The public believed 41% were completely false. Estimated £1.9bn insurance fraud p.a. £44 per policy is absorbed cost for claims fraud
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It’s our job Helps keep claims costs down This has Solvency and Reserving
implications The Regulator says so Right customer signal In theory, honest claimants get through
faster In theory, better resource matching &
allocation
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Increased effort & process is costly Is effort rewarded Is outcome measured Information sharing is inadequate Burden of proof is high, so how good is the
work Volume processes present opportunities
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Thank You