Being caught out by fake car insurance from a ghost broker ‘could be crushing,’ according to the Insurance Fraud Bureau (IFB). Its latest awareness campaign highlights that one in three cars seized by police for no insurance is crushed[i]. The Republic of Ireland is similarly impacted by this issue – just like mainland UK – so it is for good reason that we have recently launched LexisNexis® Emailage® Rapid in Ireland, our innovative fraud risk scoring solution based on email address intelligence.
Ghost brokers tend to target their efforts on young drivers, not least because of their engagement with social media where they commonly advertise their ‘services’. Just to prove that point, in a recent study[ii] we found that 55% of 17-24 year olds in Ireland have been tempted by an advert for cheap insurance on a social media site, and 16% of this same age group have actually bought a policy through one of these adverts that could easily turn out to be fake.
As the cost of living crisis sees families seeking savings where they can, offers to reduce high insurance premiums could become tempting for many – especially younger people who tend to pay higher premiums, commensurate with their risk. So, the IFBs campaign is expertly timed, but with awareness of ghost broking at just 24% based on our research, the insurance industry in the UK and Ireland remains under significant pressure to improve the robustness of identity validation checks prior to and post policy inception.
The threat of application fraud is by no means a new one. Even prior to the pandemic, data from the Association of British Insurers (ABI) highlighted that in 2019, cases of application fraud rose by more than 200% on the previous year[iii]. Just recently, Aviva released data showing the number of fraudulent motor insurance applications being detected has jumped by 16% since 2021[iv].
The insurance industry’s efforts to put a stop to fraudsters has been ongoing, using public records data and data shared within the industry. These methods of identity validation can however prove time-consuming, and cause friction in the on-boarding process for genuine applicants. So, as fraudsters use increasingly sophisticated techniques, so too must insurance professionals work harder to spot fraud red flags.
This is where email address intelligence can help. 91% of people have had the same email address for three years or more, and 51% for more than 10 years[v], so we can see how an email address sits at the very heart of a consumer’s digital identity. Being linked to multiple online transactions and accounts, it is a rich source of behavioural insight and transaction history, which leaves an invaluable digital footprint for detecting application fraud.
Insurance providers in the UK can already leverage this email intelligence to help assess risk, and now LexisNexis® Emailage® Rapid has arrived in Ireland.
Built from billions of transactions from global payment processors and other online industries, including over 82,000 fraud events shared on average daily[vi], Emailage Rapid provides an instant risk score at the point of quote[vii] for whether the identity is genuine, linked to fraud, or whether it could be a fraudulent ID. It can also indicate if the email address and domain even exist, when the email address was first seen, or whether the email address bears a close resemblance to the proposer’s name for the policy.
Given that our survey results indicate that 58% of people in Ireland are worried about having their identity compromised for insurance fraud, – rising to 71% amongst 17-34 year olds[viii] – evolving the ID verification process has become essential to boost the market and its customers’ resilience to fraud, while also cutting cancellation costs.
Email intelligence for identity validation has worked to great effect in the banking sector, leading to the launch of LexisNexis Emailage Rapid for the UK insurance market. Now, Irish insurance providers have an opportunity to boost their fraud prevention strategies in a seamless way for their customers, and have greater confidence over the risks they are taking on.
by Shane McCabe, Strategic Account Manager, Insurance, Ireland, LexisNexis Risk Solutions
[ii] 1000 insurance purchasers surveyed in the ROI, November 2022 through Maru/Hub.
[iii] ABI Fraud data 201
[v] DMA Insight: Consumer Email Tracking Study (2015) – UK respondents
[vii] LexisNexis® Emailage® Rapid is a powerful fraud risk scoring solution based on the email address and other personal information provided during the application process. In February 2020, LexisNexis Risk Solutions acquired Emailage, a fraud prevention and risk management solutions provider. LexisNexis® Emailage® is a proven risk assessment tool that is fuelled by continuously updating global digital insights and uses a patented, proprietary analytic approach to reimagine fraud detection.
[viii] 1000 insurance purchasers surveyed in the ROI, November 2022 through Maru/Hub.