Member Article

Manchester law firm saves insurers half a billion pounds in four years

Manchester based law firm Keoghs, the largest counter-fraud legal services provider in the UK, has helped insurers avoid paying over half a billion pounds on suspected fraudulent claims over the past four years.

Keoghs’ fraud division has saved over £145m in the last year alone for insurer clients and over £525m since 2011.

James Heath, Director of Counter-Fraud Strategy at Keoghs said: “The past year has been a learning curve for many, with the implementation of the Jackson reforms impacting the way insurers view the handling of suspect claims.

“The aim of the reforms was not only to reduce the cost of Personal Injury claims, but to try and eradicate frivolous and fraudulent claims.

“There has certainly been evidence since the introduction of the reforms that the claimant supply chain has been disrupted – especially so in areas of the market dominated by claims management company referrals and ATE premiums.

“However, in our opinion it is unlikely that such disruption will be permanent – with some clients already reporting that claims frequency is approaching pre-reform levels.”

“The level of sophistication with which most insurance fraud is now perpetrated, and particularly the organised criminal’s proven ability to adapt to changing circumstances, suggests that fraudsters will find ways of circumventing the reforms.

“It is therefore still vital that insurers focus on fighting fraudulent claims – the way they do this may just have to change to fit in with the portal process.”

As in previous years, Keoghs’ figures show that organised fraud continues to grow, with just under 29% (£42m) of overall savings in 2013 coming from cases handled within Keoghs’ fraud rings unit.

Since 2011, Keoghs’ fraud rings unit has achieved savings of over £138m for clients. The past year has also seen a surge in credit hire fraud claims, with savings of over £4m achieved.

Mr Heath added: “Since our fraud division was created 16 years ago, insurers have adapted and have become a lot more efficient at handling fraudulent claims.

“However, the issue is still there, and insurance fraud is unfortunately still part of the claims culture. The challenge now is to build on what we already know, increase detection rates and improve the efficiency of what we do.

“Using the right tools and processes are key – as is intelligence sharing and the support of agencies such as IFB, IFED and IFIG.”

This was posted in Bdaily's Members' News section by Simon Malia .