Urgent action needed on insurance fraud

Urgent action on fraud and increased data sharing now critical to driving further motor insurance reforms, according to the CEO of Liberty Insurance, Sharon O’Brien.

Ms O’Brien comments came as the insurer held a stakeholder event in Dublin earlier this week where it brought together a number of leading Irish and international motor insurance experts to debate the challenges in successfully implementing motor insurance reform.

At the event, Liberty Insurance CEO Sharon O’Brien outlined Liberty’s key policy priorities for driving further reform of the motor insurance market.

Key reform proposals include:

• Creation of a National Fraud Database: A comprehensive policy and claims database for enhanced fraud detection, allowing for a crackdown on serial claimants. Managed by the Central Bank, the database would be accessible by all insurers operating in the Irish market and by the Gardaí.

• Zero tolerance of fraud: Existing legislation provides for a jail sentence where serious insurance fraud has been proven, but evidence suggests that this is very rarely applied with only a small number of successful prosecutions. In most instances, the fraudster’s case is dismissed and he or she walks away without consequences. Liberty Insurance believes this must change and there needs to be a more rigid enforcement of existing legislation to successfully prosecute insurance fraud with lengthy custodial sentences, where appropriate.

• Fast-track the establishment of National Garda Insurance Fraud Unit: While the Gardaí currently investigate all fraudulent activity, there is no dedicated resource for the growing problem of insurance fraud. Ireland is out of sync with other countries, including the UK which has these centralised resources. Ireland needs a well-resourced, committed unit to tackle insurance fraud.

• Enhanced training for judges to ensure greater consistency in the level of personal injuries compensation awarded: The lack of consistency in the level of compensation awarded in personal injury cases highlights the need for additional training for judges to ensure greater alignment with the levels set out in the Book of Quantum. Such training is commonplace across a wide range of jurisdictions, including the UK. Ireland must follow this example and ensure that our judges are fully equipped to determine appropriate levels of compensation.

• Strengthen Personal Injuries Assessment Board (PIAB): Strengthen the operational powers of the Personnel Injuries Assessment Board, which would require claimants to attend medicals and to submit all information requested by the PIAB to enable it to fully conduct its assessment.

Commenting on Liberty’s reform proposals, Ms O’Brien said: “Liberty is one hundred percent committed to reform of Ireland’s motor insurance industry. We recognise the significant pain that customers have felt over the last number of years. We have played a key role in the work of the Cost of Insurance Working Group and will continue to do so.

“Important progress has been made. However, we believe that a concentrated focus in the areas of fraud and data sharing in particular is needed to drive further successful reform and ultimately drive down costs for motorists. We have to prioritise those initiatives that will have the greatest impact; fraud is a key driver of increased insurance costs and it needs to be tackled head-on, in the interests of our customers.

“We believe that our proposals send out a strong message: anyone who commits fraud will not gain by it and will instead face stiff penalties when they are caught out. We also want to see data shared between insurers and the Gardaí more effectively, to ensure greater cooperation between both in detecting and stamping out fraud.

The creation of a policy and claims database, overseen by the Central Bank to ensure rigour and independence, is another important step on our journey of industry reform.  It aligns with the ambition of the Cost of Insurance Working Group to improve data availability and provide enhanced transparency in the claims environment, leading to greater stability in the pricing of motor insurance.

“We urge Minister D’Arcy, Minister Breen and other key Government stakeholders to give careful consideration to our proposals to ensure that the progress made to date in reforming our industry does not run out of steam.”

The Liberty Insurance hosted event also looked at the positive opportunities for further reforms arising from the roll-out of driverless cars. Deeksha Joshi, Principle on the Corporate Strategy & Research team at Liberty Mutual, examined the conditions required of countries like Ireland to become early adopters of such technology. Ms Joshi recommended that Ireland move to legislate for driverless cars in order to ease their eventual introduction onto Irish roads in the future.

Other keynote speakers examining barriers to reform in other countries—and how they were overcome—included Ben Fletcher, Director of the UK’s Insurance Fraud Bureau (IFB), which acts as a central hub for sharing insurance fraud data and intelligence and seeks to detect and disrupt fraud; and, Sara Costantini of CRIF Decision Solutions, a global leader in providing technology solutions to detect fraud.