How Can Insurers Work Together to Prevent and Fight Fraud
Customer
Malta Insurance Association (MIA)
Challenge
How can insurers work together to prevent and fight fraud?
Solution
FRISS Country Platform, ‘Malta Insurance Fraud Platform’ (MIFP)
Results
Identify fraudulent claims continuously with straight through processing
Allow claim adjusters and fraud investigators to work more effectively
Reduce the member company’s loss ratio
Establish a fraud fighting culture
Customer
The Malta Insurance Association (MIA) is a non- profit organization that represents the views and common interests of all insurance companies in Malta, both indigenous and foreign. Every insurer transacting insurance, whichever its line of business, is eligible for membership within the association. Since Malta is a small country there are about twenty insurers currently active in the market. MIA members offer employment to some 786 employees. In addition, they are responsible for more than 434 insurance intermediaries, with hundreds more employed in ancillary services such as insurance broking, insurance surveying, risk management and loss adjusting.
Challenge
Many European countries share claims and/or incidents. There are still a number of countries (mainly the smaller and economic emerging markets) that not share data yet. Malta used to be one of those countries. MIA acknowledged that insurance fraud is a serious problem for the insurance companies active in Malta (i.e. their members) and that fraud had a significant effect on their loss ratios. Fraudsters are particularly creative in their approach and if they commit fraud at one insurer, they can easily move to another insurer without being alerted as a high risk.
Thus, the Maltese insurers are dealing with many fraudsters that are hopping from one insurer to another. Moreover, Malta is a country with numerous foreigners which in this case also means a great amount of imported cars and other accompanied matters to take into account. Adrian Galea (General Director of MIA) states that ‘’still the main challenge was to bring competitors together, to make them work as one team on the platform and share information with each other’’.
MIA’s request for FRISS was: How can insurers work together to prevent and fight fraud?
Solution
In order to realize a fraud platform wherein the Maltese insurers could work together in the combat against fraud, MIA started the conversations with several vendors, including FRISS. The four largest insurers, which represent 80% of the market, were willing to join the platform from the start. None of the participating insurers used a fraud and risk solution before or a knowledge sharing platform whatsoever.
With regard to the research and selection process, MIA was the designated party to facilitate everything. MIA also communicated with the vendors on behalf of the insurers, which were the ones that had to make the decision eventually. The Maltese insurers also wanted to attain a competitive advantage, in a competitive market. With such a platform they would be able to benchmark with each other and also share their vision and insights when it comes to risk assessment.
MIA executed an extensive and elaborate research process, including demo’s, documents, presentations as well as multiple reference visits to other clients, before selecting FRISS. After various interactive sessions, discussions and workshops, FRISS realized one definition for four insurance companies. FRISS provided an equal and generic implementation for all the integrated Maltese insurers.
The ‘Malta Insurance Fraud Platform’ (MIFP), was realized in 2012. It contains the following elements:
• Claims and incidents: Sharing claim history and incidents between insurers
• Claims Clearinghouse: The settlement of liability via a shared platform
• Exchange no claim discount: Increase efficiency by electronic exchange of damage free years
• Road Safety Program: Preventing future claims by analyzing locations of accidents and circumstances
Besides insurers, also business partners like business process outsourcing or claim adjustors can connect to the platform. The benefits of a country platform are:
•Work together in fighting and better identifying fraud
•Insights in claim and incident data without exchanging the data
•Interfaces to external data are available for all participating insurers
•Compliant with existing law and regulations
Results
The participating insurance companies in Malta are an example of how working together is more effective in combating fraud. The Malta Insurance Fraud Platform is used as the underlying infrastructure, enabling all participating insurance companies to share knowledge.
The Maltese insurers benefit and gain insights from sharing knowledge, potential fraud incidents and claims history. Each individual insurer using the country platform is able to benchmark the success rate of fraud cases in order to maintain and improve the fraud indicators over the entire platform. In 2013 a major fraud network was uncovered by the platform and has been taken to court. The participating insurance companies are very satisfied with the fraud platform and are continuously seeking for ways to improve the platform, together with FRISS. The Maltese insurers and MIA as their representatives are convinced of the current value and future potential of the FRISS country platform.