Pulling it all together - systems, rules and case management

A large organisation is likely to run multiple fraud detection tools; the problem lies less in generating alerts, although sifting the genuine from th false positives is a challenge, than in how to read across the diverse outputs. Business process management holds the answer, says Reetu Khosla of Pegasystems.

The ringleader of a gang that staged nearly 100 car accidents in the North West of England, netting almost UK£1.6 million in bogus accident claims, was recently jailed for hour and a half years. Critically, the crime was only uncovered by chance, when office workers spotted gang members crash repeatedly on the same roundabout.

This is just one of a number of hihg profile incidents highlighting a massive growth in the level of detected car insurance fraud, with almost one in five claims potentially fraudulent. According to the Association of British Insurers (ABI) this represents a 75% increase over the past three years and is currently running at some UK£5 million per week, much of which is linked to the economic downturn.

such activity ranged from straightforward misrepresentation - providing false information to get a cheeaper quote - to more dangerous frauds like vehicle arson. As in the above example of 'cash for crash' claims - in which car occupants repeatedly stage accidents, often with ownewrs of high-value vehicles, and falsely claim for whiplash injuries - it is very difficult for insurance companies to detect and so combat the fraud.