Greg Smith, president of Canadian operations, Crawford & Company
Macro industry trends, including the impact of climate on claims frequency, the growing talent gap, and technology integration, will continue to be significant stories in 2024. But fraud is an emerging trend adding more weight to the industry’s shoulders.
Over the past two years, the insurance industry has seen an unprecedented increase in automobile theft, increasing claims costs in this area by over 300%. Organized crime rings are deploying sophisticated techniques on an international scale. This is the thin edge of the wedge in terms of what we predict will be a potential increase in claims activity impacting insurance carriers.
History shows economic downturns bring hikes in claims frequency, since policyholders make claims for smaller losses they might not have claimed previously. We also see opportunistic and premeditated fraud increasing in both commercial and personal lines claims. A looming recession means we should anticipate increased incidences of fraud in the claims space. This will require a strong collective effort from the insurance industry to help detect fraud when it occurs, while still balancing the need for excellent customer service and adhering to principles of good faith.
Opportunities exist to leverage technology. At an industry-wide level, we are getting better at collecting and mining data to identify systemic fraud. On an individual claim level, to help minimize fraud, AI tools can help thoroughly investigate losses, making sure all policy conditions have been met and all facts are known before making a coverage decision.
This ties back to talent issues. Depleted are the skills and expertise P&C industry professionals possessed the last time we went through a tough economic cycle. We must continue teaching investigation and fraud detection skills to the next generation of adjusters so they’re well-equipped to address and tackle this challenge.
Successfully combatting fraud in 2024 means paying attention to the details. We must invest the time to investigate claims promptly and thoroughly and provide excellent service to the policyholders presenting legitimate claims; at the same time, we must find ways to resist illegitimate claims.
