Insurers are More Effective in Fraud Detection

Insurers are more effective in fraud detection Insights

The amount of insurance fraud cases has doubled: insurers are getting more effective in fraud detection.”We are now better at detecting who is committing fraud, when they are committing fraud and what kind of insurance is involved”.

Are today’s young adults bigger cheats than their parents? The Dutch Association of Insurers announced on Thursday that it sees “an emerging trend” in which “more and more young people” try to “recoup” some of the costs of their long-haul holiday by submitting a false insurance claim. In the first six months of the year, the sector organisation noted that the number of fraud cases with travel insurance involving those in the age range 25 to 35 years “more than doubled” compared to two years ago.

Enquiries have shown that, expressed in absolute figures, there is an increase in fraud cases from less than one hundred to about two hundred. While it is true that this is double the number, does it reveal a social trend? Does it indicate a blurring of moral standards among those aged under 35?

More effective fraud detection

Insurers are getting smarter in detecting fraud. This is partly due to experience. Insurers learn from each other’s incidents and exchange information about dubious customers via a national alert system. The Dutch sector has a blacklist containing the personal data of sixteen thousand people who have clearly tried to defraud their insurance company.

Last year ten thousand insurance fraudsters were exposed, which is 20 percent more than in 2015. “We are now better at detecting who is committing fraud, when they are committing fraud and what kind of insurance is involved”, the Dutch Association of Insurers said. While, two years ago, it took insurers four investigations in order to find hard evidence against a fraudster, last year only three investigations were needed.

Over 27,000 incident investigations resulted in a saving of 83 million euros for the insurance sector last year. This is 4 million euros more than in 2015. More than half of the fraud occurs in the applications for insurance cover: in 5,600 cases. Applicants, for example, fail to mention that they have submitted significant claims to other insurance companies. Or they deny a criminal history. This ultimately comes to light.


The digitisation of society is an aid to insurers in detecting fraud, but it also complicates the work of fraud experts. Because fraudsters also have access to modern technology. An example from a Dutch insurer mentions a claim resulting from a fictitious burglary. “The customer handed us a bank statement that was almost impossible to distinguish from the real thing and a digital imitation of an invoice from an online department store. It was unbelievable how real they looked. The woman claimed damage for a stolen television worth 7,000 euros and an iMac worth 3,000 euros. The fact that these two items were the most expensive items in the catalogue prompted us to ask questions.”

After the insurance company had informed the woman about its suspicion of insurance fraud, she threatened to go to the consumer program Radar to name and shame the insurer.  When the insurer confronted her with hard evidence, namely that she was not a client of either the department store or the bank, she radically changed her tone and sent us an excuse letter. In her letter, she asked us not to include her personal data in the national warning system. But we do do this. If we have hard evidence that a customer has committed fraud, then we impose strict sanctions.”

Fraudsters caught

Anyone who is caught committing insurance fraud will have their current insurance cover cancelled immediately. The police and courts are rarely involved (in less than 1 percent of cases). The fraudster immediately receives a payment demand of 532 euros for the investigation costs incurred. All other costs of the insurer and any amounts wrongly paid are also collected from the fraudster.

And if the case is serious enough, the fraudster will be included in the national database of insurers for up to eight years. Those who are on the blacklist are hardly able to take out insurance cover. The number of insurance options are limited and the premiums payable are exceptionally high.

Striking examples

Case example 1: A customer reports the theft of his boat. The dimensions of the boat he specifies presents a jarring problem: his boathouse is much too small to hold such a boat. Claim rejected.

Case example 2: After returning from holiday, a customer reports that his winter coat was stolen in South Africa. But it was the middle of summer there? An investigation shows that the holidaymaker has previously submitted multiple theft claims, amounting to a total of 7,750 euros. Claim rejected.

Case example 3: A customer claims serious injury after a collision. A few weeks later, the insurer discovers that the man is a kickboxer and that he is back in the ring. Claim rejected.

Case example 4: There is considerable damage in the Netherlands after a heavy storm in the summer of 2016. A customer reports storm damage and sends a photo of a ruined fence. The photo turns out to have been taken from the internet. It dates from 2015. Claim rejected.

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