Understanding the fraud behavior? “Crime never forgive the murderer” (V. Hugo) Madalin Rosu Responsible of Motor Insurance Section Munich, March 2015 6 figures on Romanian insurance market GWP ~1,9 billion euro Non Life GWP ~1,5 billion euro Motor share in NL 70% MTPL share in NL 43% MTPL combined ratio 117% Bodily Injuries * FSA press release at 9 months 2014 * 25% from all claims payments in MTPL 5 more figures on Romania Population ~21,3 milions Drivers (licenced) ~8,8 milion Number of cars ~ 6 milion Cars ratio 220 cars / 1000 inhabitants Deaths in accidents ~ 5 / day * Romanian Police Report for 2013 Behavior scheme We need to concentrate our focus on the big ball. E B T In order to better understand big ball we need to understand as well it’s creation. This equation is valid on any person. Behavior understanding People are rather judging others in order not to be themselves judged first (A. Camus) Do you have enough information's and skills to “create” a false claim, would you do it ? Did you experienced in your activity an interview with a fraudster and convince him to renounce to the claim ? What are the first thoughts that you have on your mind when first question was addressed to you? Is not the answer the most important but the feeling that you associate with. All individuals are using the same pattern (E+T=B). The most important is to identify what type of E or T is important and valuable for him/ her. Behavior understanding Claim value = 9.000 eur Help ! “Laws are like spider nets through which the big flies are passing but the small flies get stuck” (H. Balzac) What are the chances for a “successful fraud” without some hints ? Helpers : Broker, agent, employee, claim handler, manager, authority, politic etc. Help No help What about help? Mirror of car at claim moment different than insurance Car at insurance it is perfect new from showroom . Tires have specific sign as from factory. What about help? Different exhaust silencer and missing parking sensors Plate number has specific signs which appear only in case of risk inspection What about help? One year and a half later Same car (VIN) CASCO insured with 2nd Insurer Pictures are taken on risk inspection moment Sum Insured – 20.000 euro Two years later in another insurer 2nd Claim value ~ 8.000 euro Regress on other insurer 3rd Total loss – Fire Claim paid by 1st insurer Placebo effect in fraud fighting Human mind is functioning in a very interesting way especially when you as a person start to risk something….. Going back to the E+T=B, just simply deliver a very strong information by mistake while fraudster is near by and you implement already the T in the equation. Invest time to observe and make notes. Behavior is changing and emotions will show what is need to be demonstrated Placebo can be used in a huge variety of versions. On the organized crime groups this should be adapted or even not used. Placebo and behavior observation Groupama 07 Nov Euroins 26 Oct Generali 20 Nov Uniqa 22 Sep Asirom- 07 Nov Technology vs human Responsibility allocation – teams, cooperation • Which one to be first filter? Information exchange – internal, external Prevention – UW, client scoring • • What will be the level of training to the claims technicians What will be the next phase in fraud when technology will prepare Processes for identification, demonstration Tools for identification, demonstration Incentives Training Plans for development - all main LOBs What to do ! Best practice – Develop specific particular plans to cover gaps to best practices. Regular knowledge sharing within the actors in the market– deep dive into specific topics Tools – contributive negligence, success sharing – court acts&argumentation&litigation, overall calibration of approach (BI specialized lawyers, special type of claims) Expert level - Support community of experts – structured info exchange, quick problems resolution, support circulation of know how within companies in the market. Observe, understand and create models and patterns. Thank you for your attention ! Madalin Rosu