02-03-2021

The power of stories

In 1997 Harold Skipper wrote about the ways in which insurance contributes to society and economic growth by aiding economic development and stability. However, when claims have to be defended or declined, these can be difficult stories to tell to those outside the industry and without the context of being informed on the issues.

Fraud is different. Everyone can understand and celebrate those outcomes where someone undeserving of compensation fails in their deception and where someone deserving of consequence gets what is coming to them.

These stories are important. Told and retold they illustrate the insurance industry's commitment to tackle and prevent fraud. They underline the growing awareness within the courts that fraud exists in this space and within society that there are consequences for being caught.

When people put their kids to sleep, nobody tells bedtime facts.

Jonah Berger

Our stories are part of effective fraud prevention strategies that create a deterrence effect. Telling them is part of why defending fraudulent claims delivers a return on the investment and why having an effective fraud strategy from detection to deterrence remains high on the insurer and insured compensators’ agenda.

That is why at Kennedys we ensure we share our stories. We share them with our clients (of course, they are their stories as well), we share them with our colleagues across the firm, and we share them with ourselves within our department. And in this blog I would like to share some of this week’s stories with you…

The one with memory recall difficulties…

Following a minor collision, a claim was presented for personal injury and associated costs arising from the accident. Whilst the injuries complained of were said to have been limited to 3 months, no one could understand why this incidental meeting of cars could have created such suffering. The inability to comprehend was only made worse by the associated costs for vehicle recovery, storage and hire of close to £40,000.

Our investigation identified a recent accident history that the claimant could simply not recall; after all it had been at least 6 months before this one. This lack of recall all the more surprising given he had spent £1,100 repairing his vehicle and incurred another £30,000 in credit hire charges (yes, that’s close to £70,000 in less than a year). He must have only just got his car back before this second accident happened.

Our client’s resolve remained strong whilst the claimant negotiated with himself before discontinuing his claim before on the day of the trial.

The one with the car that just kept going...

In March 2018 a visitor to our shores was involved in an accident. It was the Visitor’s fault. He was thankful that it was not too bad and went back home.

His victim presented a claim for personal injury, vehicle damage, recovery, storage and credit hire. The injuries so severe physiotherapy was required; the damage to the vehicle so sufficiently damaged that it could not be driven.

The Visitor, back home, was not concerned about this claim. It was not a big accident, his insurer was dealing with it and it was now so far away, back in the UK. Our client was looking into this claim with their eyes part closed.

The investigations focused on the vehicle. Why did desktop enquiries show an MOT during the hire period? Why had the mileage increased during its off-road storage? And why were the hire and storage companies dissolved entities?

We pressed home these concerns and applied pressure from the earliest stages of the litigation process. Under the pressure the claimant, found out, wanted a way out. This involved dropping the whole claim and paying the insurer’s costs. All the while, the Visitor was blissfully unaware.

The one with a criminal sanction...

Three claimants took a chance on presenting claims for personal injury and other losses. The claims were fraudulent. The incident was captured on CCTV. The claims were withdrawn. The claimants had tried and failed, but no harm done.

The frustrated insurer believed that there should be consequences. Had they succeeded this would have been an expensive claim and the fraud sophisticated in its execution, including witnesses. The insurer took action and successfully pursued a private prosecution.

Three claimants took their chance, and now face sentencing next month.

Not only do we tell these stories within our organisations, but they are told amongst communities. Sometimes they are heard by committed fraudsters who will learn the lessons and adapt their behaviours in the future - making insurance fraud detection an evolving science and art. Often they are heard by people who recognise that dishonesty has consequences and are deterred from thought to present false or exaggerated claims. These stories, told often and told well, help prevent fraud and save money.

Fundamentally Honest blog