Mid-year results show leap in UK casualty fraud & application fraud cases

Authored by Allianz

Allianz Commercial UK has seen a marked increase in casualty fraud in the first six months of 2023. 

The claims teams at Allianz have successfully prevented £38.4m worth of Commercial insurance fraud since the start of 2023 with over half of that being related to casualty fraud, particularly fraudulent major loss claims.  

Overall Allianz has seen a £2m increase in fraud savings against the prior year. This highlights the improvements the business has made with early detection, through the analysis of data from machine learning, which assists in finding suspect claims.

Commercial Property fraud has surpassed expectations at the half year point, with savings of £1m recorded above plan, and a further £1m saving in detected application fraud, which is down to the hard work and dedication of the team focussed on front end fraud prevention. 

Exaggeration within claims is still a key trend that Allianz is seeing, as well as increasing fraudulent behaviours around claims farming. In the application fraud space, there is a higher prevalence of phoenix companies and an increased level of false No Claims Discounts (NCDs) and Confirmed Claims Experiences (CCEs), ghost broking is also showing signs of growth.

Recent cases include:

• A major fire at a clubhouse turned into a police investigation, after a tip off that the policy holder was believed to be involved in the cause of the fire. Appointed loss adjusters and forensic investigators uncovered false documentation was provided to Allianz from a contractor who allegedly made safe the electrics at the property prior to the fire occurring. The full investigation led to the claim being declined which resulted in a saving of just under £2.4m.
• A fraudster has been found guilty of a total of four charges relating to fraud by false representation and sentenced to a 12 month community order following a string of fraudulent claims against Allianz and LV=.

James Burge, head of counter fraud at Allianz Commercial, commented:

“Our experienced investigation teams are utilising our new machine learning tool to enable them to identify claims earlier and more quickly, ensuring that those who falsify all types of claims are fully investigated and held accountable. We want to ensure our law abiding customers are fully supported and covered with the right levels of insurance, this is even more important during these difficult times.”