Insurance fraud is not a victimless crime and affects everyone in the UK. The UK Association of British Insurers estimates that fraud adds, on average, an extra £50 to the annual insurance bill for every UK policyholder. According to ABI figures, in 2019 insurers uncovered 130,000 fraudulent claims worth £1.32 billion. It is estimated a further £1.3 billion goes undetected. Therefore, tackling financial crime in insurance remains an industry strategic priority.
Evidence from recent studies carried out by insurers suggests that insurance fraud funds and facilitates other serious crime, including drug trafficking, money laundering and modern day slavery. Financial crime remains firmly on the legal and regulatory agenda. The annual money laundering test is no longer enough - Firms and individuals must know how to protect clients and themselves.
Insurance fraud has a significant negative impact on the industry and the risks are evolving, technology is advancing at a rapid pace, and regulators are starting to show interest in applying more scrutiny on insurers’ risk management frameworks. In this context, how can insurers be confident that they are effectively and efficiently managing their fraud and financial crime risks?
This course is designed to provide practitioners within the Insurance market with the tools and controls to manage fraud risk more successfully, mitigate the risk through best practice and implement a robust internal framework. The course provides a comprehensive understanding of fraud threats, how to formulate an effective strategy to prevent these threats and how to manage the response when they occur. You will learn how to implement key fraud management strategies at your firm to manage the risk to your business.
The course also explores international fraud management best practice and anti-fraud frameworks. This course outlines the threat to financial crime and its consequences for the insurance industry and the key anti-financial crime controls that firms should have in place. The FCA and BIBA require insurers to be able to demonstrate robust policies and procedures that comply with regulatory expectations and training to all staff.
Another long-term trend that makes it hard to fight increasing financial crime is a fragmented business and technical approach. Anti-financial crime efforts in the industry are addressed by different teams with multiple processes, teams and tools – that all deliver similar capabilities. Rather than buy comparable capabilities over and over in separate tools, insurers are looking for more integrated ways to fight all types of financial crime. They want to resolve problems of incompatible, duplicated or stand-alone technologies. They need a complete picture of metrics but the data may live in separate silos. For such issues, advanced technology like AI and predictive analytics help. But technology alone is not a silver bullet.
Yet another trend is an emerging holistic approach against financial crime. It includes a common set of leading industry practices such as a financial crimes policy and common language, organization, skills, core processes and key performance indicators. These transformative methods can be summarized by three ideas: People (skills and roles), processes (procedures and policies) and technology.
Addressing people, processes and technology together is more effective than piecemeal efforts. It takes into account the fragmented resource picture, funding issues and the increasingly complex financial crimes landscape.
With over ten years experience helping organisations to build high performing risk and compliance teams, FourthLine Learning was launched to help risk professionals and teams to improve performance, navigate market complexities and make critical decisions more effectively. Our FourthLine Learning...