Crawford & Company · NYSE:CRD.A
Crawford & — Investor Presentation (March 2012)
14 slides from Crawford &'s investor presentation, March 2012
Slide 1: The Rising Cost of Insurance Fraud
The Rising Cost of Insurance Fraud Clive Nicholls Senior Vice President – Global Markets © Crawford & Company
Slide 2: Insurance Fraud – The Association of British Insurers estimate that:
Insurance Fraud – The Association of British Insurers estimate that: Insurance Fraud Costs the industry in excess of £2 billion each year Insurance Fraud adds an additional £44 to every honest policyholders annual premium UK Insurers detect 2,500 fraudulent claims each week However it is estimated t
Slide 3: Attitudes to Fraud
Attitudes to Fraud A survey of 3,000 adults revealed that 16% Would not rule out making an exaggerated claim 44% Think it acceptable or borderline behaviour to increase the value of an item when claiming 30% Feel the same way about overstating the extent of damage © Crawford & Company
Slide 4: Attitudes to Fraud
Attitudes to Fraud • The most common and costly is opportunistic fraud where individuals exaggerate or inflate a genuine loss. • Only a minority of cases involve fabrication of an entire claim though these can be serious, e.g. Credit Hire Fraud via an organised crime syndicate was recently uncovered
Slide 5: Fraud in the Lloyd's Market?
Fraud in the Lloyd’s Market? • It is estimated that 13% to 16% of all claims have a fraudulent element but clearly varies by class of business. • The Lloyd’s Market handles circa 200,000 claims per year with a settlement value of approx. £11bn • Potentially 32,000 claims received by the market each
Slide 6: Fraud in the Lloyd's Market?
Fraud in the Lloyd’s Market? • Increasing pressure to return an underwriting profit makes fraud detection more important than ever. • The advent of CTP is placing greater pressure on Managing Agents’ claims staff and increasing the likelihood of fraudulent claims being undetected. • Lloyd’s Minimum
Slide 7: Insurance Fraud – The Industry Response
Insurance Fraud – The Industry Response During 2011, two key industry initiatives have been introduced in response to Insurance Fraud: • Creation of a National Insurance Fraud Register – an industry owned database enabling Insurers to share information on known fraudsters and identify anyone who fai
Slide 8: How fraud is avoidable
How fraud is avoidable • Prevention is better than cure – what fraud detection measures are there at underwriting stage? • Insurers have a principal role in investigating high volume, low value opportunistic fraud. • Fraud is avoidable. Claims leakage can be detected and prevented through: Intellige
Slide 9: Crawford Experience and Approach
Crawford Experience and Approach • Fraud can occur at any point during claim lifecycle. • Anti-fraud culture employed throughout all our claims management departments from FNOL to settlement. • Each claim reviewed against fraud indicators at point of referral, during site visit and when there is any
Slide 10: Crawford CFS Suite of Services
Crawford CFS Suite of Services • Counter fraud triage, including open file review • Desktop fraud investigation using applied psychology via investigative interviewing techniques • Field Investigation including major and complex loss • Return on investment analysis by peril and reduction in /measure
Slide 11: Case Study – AD to Electrical Appliances
Case Study 1 – AD to Electrical Appliances • Laptop & PSP knocked off kitchen work surface by child. • Items inspected by supplier and damage not consistent with circumstances presented. Laptop had suffered liquid damage and was last used two years prior to alleged incident. • Customer oriented inte
Slide 12: Case Study – Theft of Jewellery in Cyprus
Case Study 2 – Theft of Jewellery in Cyprus • Alleged theft of jewellery in Cyprus involving unusual circumstances. • Budgeted action plan agreed with Insurer for site investigation to be undertaken in Cyprus. • Premises examined which revealed no forcible or violent means utilised to enter/exit pro
Slide 13: What does this all mean?
What does this all mean? In 2011, we saved our clients in excess of £25 million claims costs through the application of our wide ranging counter fraud techniques, delivering a 51% repudiation/withdrawal rate on claims referred to CFS and a return on investment of £17 for every £1 of fee spend. © Cra
Slide 14: Fit for the Future?
Fit for the Future? • Prevention is better than cure. • What data sets do you have available to turn into knowledge? • We live in a digital age. Fraudsters move with the times. • However, old methods sometimes still work, e.g. chip and pin vs. cheques • To meet customers needs the industry will need
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