Inside Travel Claims
Tourism has become a popular global leisure activity. In 2008, there were over 922 million international tourist arrivals, with a growth of 1.9% compared to 2007. International tourism receipts grew to US$944 billion (euro 642 billion) in 2008, corresponding to an increase in real terms of 1.8%.
Recent surveys indicate Americans spend more than $1.3 billion on travel insurance and the World Tourism Organisation estimates between now and 2020 there will be more than 700 million people visit Europe, 300 million Asia and nearly 300 million visitors to the US. This trend further emphasises the need for a truly international alliance.
In recent years travel fraud has been escalating at alarming rates and without doubt contributes significantly to the majority of small claims fraud within the insurance industry as a whole.
We are inundated with editorials and statistics on the extent of fraud, however the reality is no one really knows how deep or ingrained this type of fraud really is simply because Insurers have been, and always will be conservative when releasing their fraud numbers.
It is then feasible to assume the extent of fraud is really an unknown because so much fraud flies "under the radar" with hundreds of thousands of suspicious low value claims deemed "not worth pursuing" so the claim is paid. What may have been a fraudulent claim is written off and never included in the final statistics.
A survey in 2008 the Association of British Insurers indicated around 4300 travel insurance claims worth £5m were detected the previous year. That's an average of £1162.00 per claim. In the same year, Direct Line Travel Insurance found that as many as 750,000 Britons had made a false claim on their travel insurance. Imagine if each one of those 750,000 Brits had a claim worth a paltry £100. That is £75,000,000. This demonstrates the reality of statistics, they are there as an informational guide only.
The reality is, we just don't know how big travel fraud really is!
There is no silver bullet in tackling this kind of fraud, but there are opportunities to develop a cohesive and collaborative program to better prepare for the countless number of suspicious claims that arrive on the claims desk, every hour of every day.
Centricity is taking away many of the unknowns by targeting not only the organised fraudster but those willing to take an opportunistic risk.
Professional fraudsters have been plying their trade against travel insurers for far too long, inheriting and honing their skills through contacts in third world countries where fraud, corruption and kickbacks are just part of everyday life.
Opportunistic or organised, their modus operandi is simple. Use connections, family, friends, or acquaintances to help them create and submit a fraudulent claim or, simply use a computer to manufacture an event and all the necessary documents for the claim. And, finally, where possible try not to use the same travel insurer twice.
Centricity, along with our insurance and investigative partners have implemented a number of strategic anti-fraud initiatives to enable insurers to quickly scrutinise and make accurate and informed decisions on every claim.
