The detection and prevention of fraud relies on close collaboration. It is only through working in partnership with insurers that we are best able to expose fraudulent activity, take recovery actions and put a stop to the perpetrators.
That’s why, for Crawford Legal Services, it was extremely rewarding to be announced co-winners alongside Direct Line Group of the Combatting Fraud – Collaboration of the Year award at last year’s Claims and Fraud Awards hosted by Insurance Post.
Our work together initially on addressing GAP claims and how that evolved into a more comprehensive fraud response programme helped secure our mutual success on the night.
Closing the GAP
Fraudulent activity is prevalent across all forms of cover. In 2022, the average value of fraudulent insurance claims in the UK rose 20% according to the Association of British Insurers.
On the motor front, a worrying trend linked to the increase in ‘cash for crash’ scams that Crawford has been focusing on is the impact on Guaranteed Asset Protection (GAP) insurance policies of these fraudulent claims.
GAP insurance covers the difference between the value of a motor vehicle when new or when purchased, and its insured value in the event of a loss. Such claims are always triggered by a motor insurer paying a total loss.
Crawford Legal Services is highly proficient at investigating potential fraudulent GAP claims. In the case of Direct Line, we had experienced several fraudulent claims that impacted their GAP coverage and offered to recover their outlay, with the help of Crawford Forensic Accounting Services.
Crawford’s experienced forensic accountants working hand-in-hand with our traditional loss adjusting services to drive efficiencies through the claims process, assisting insurers with a range of settlement issues including fraud and misappropriation investigations.
Widening the scope
After some strong initial success, Direct Line set up a 12-month pilot for the Crawford Legal Services counter fraud team, to advise on fraud recoveries relating to motor, property, travel and pet insurance.
The assistance we gave to the client had two main elements. Firstly, we triaged all potential recovery actions where the insurer had made payments to policyholders or third parties in good faith, but where fraud was subsequently identified. Secondly, we advised on the prospects of successfully obtaining a judgment and actual recovery.
Crawford met the client’s threshold for success within three months, and the process that we have developed is now embedded as part of their ‘business as usual’ activities.
To date, our team has made successful recoveries on a significant number of cases, for claims valued in the hundreds of thousands of pounds, and we have another £2.5 million worth of recoveries in process at the present time.
Some of the initiative’s specific successes include a recovery of £500,000, including £190,000 in exemplary damages. Also, in a recent decision, we received a judgment (with damages and costs to be assessed) against a dentist who staged a road traffic accident.
One of the reasons the Crawford fraud recovery scheme is so different is that we act under a ‘no win, no fee’ agreement, so there is a limited cost risk for the client. This means we have to be highly focused as a team to obtain judgments and complete the enforcement process.
Working together
We are very proud that this initiative secured the Combatting Fraud - Collaboration of the Year award. This success recognises the effectiveness of our work with Direct Line and our ability to demonstrate the enhanced detection and prevention of fraudulent activity.
At Crawford, we firmly believe that partnerships are key to delivering an intelligent and impactful counter fraud solution. To turn the tide on fraud we all need to work together.
