Collaboration is the key to nailing down fraudsters on the property and casualty (P&C) side of the insurance industry, a step currently being taken on a number of fronts, says the national director, Investigative Services Division at the Insurance Bureau of Canada (IBC).

Bryan Gast, who came to IBC after he retired from the anti-rackets division at the Ontario Provincial Police, says the P&C insurance industry suffers from much the same source of criminality as on the life insurance side, with fraudsters ranging from individual policyholders to organized crime, both domestically and internationally.

“Being strong and unified sends a strong message that anti-fraud measures are taken seriously and we will do whatever we can to be successful.”

– Bryan Gast

There are many types of fraud. In 2012, KPMG released a report stating that there was roughly $1.6 billion in fraud just on the auto side and just in Ontario.

But there are many variables to car fraud, which makes it difficult to nab the culprits involved. Take for example, the case of a person who has had their identity stolen. The information gleaned from the identity is used to buy a high-end vehicle, which is ultimately “stolen” and then shipped overseas or down south for huge profits. So there is the actual auto theft, but also the theft of identity and the need to involve law enforcement officials in different countries, says Gast.

An investigation would then involve the original auto insurer as well as ongoing joint investigations with other insurers. IBC has investigators across the country that work closely with law enforcement in both Canada and the U.S., but then there’s also Canada Border Services Agency and the provincial ministry of transportation, says Gast.

Industry advisory group

In early February, IBC agreed to create an industry advisory group to lead the development of a strategy to ensure a smooth transition of anti-fraud services to a single entity. Previous to this, IBC and the Canadian National Insurance Crime Services (CANATICS) provided anti-fraud services to the industry.   

“Working with one without the other is a disadvantage,” says Gast.

The analytics part will be searching for indicators dealing with fraud, patterns, trends and analyses, looking at data and analysing their commonalities with other areas within the industry.

“The most successful approach in anti-fraud is collaboration and all like-minded stakeholders working together because no single organization or company can be successful on their own,” says Gast.

Later in February, a special Canadian Association of Special Investigative units group was formed on the P&C side. What’s unique about this group is that it has taken the word collaboration very seriously, looking at potential legislative changes and co-ordinating and co-operating with law enforcement and criminal justice divisions within the industry, says Gast.

Criminals adapt very well to change and are drawn to what they see as a vulnerability in the industry. “But being strong and unified sends a strong message that anti-fraud measures are taken seriously and we will do whatever we can to be successful.”