ICBC presentation PIABC Conference Oct 2015

Insurance Corporation of British Columbia
Counter Fraud in Auto Insurance
Presentation: Professional Investigation Conference
October 2015
Agenda
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2
Overview of ICBC
Pressures
Insurance fraud landscape
ICBC’s perspective on fraud
Counter-fraud challenges
Partnership
ICBC Overview
Insurance
Driver licensing
3
Claims
Vehicle licensing &
registration
Road safety
Violation tickets
By the numbers
•
4
Operations:
1.5 million driver licensing
transactions
• 3.4 million customers
• 900,000 claims
• 4,905 employees
Financials:
• $3.6 billion in claims costs
• $51 million invested in road
safety
Provincial presence:
• 900 independent brokers
• 450 accredited repair shops
• 118 licensing points of
service
• 38 claims service centres
Where your money goes
Five year average (2010 – 2014)
–
$1.00
Earned
premium
87¢
Claims
costs
5
+
=
$1.09
Expenses
- 9¢
Operating loss
5¢
4¢
9¢
+
+
+
Cost of running
Insurance
Broker
ICBC
tax
remuneration
=
17 ¢
Investment income &
service fees
+
2¢
Vehicle &
driver
licensing
8¢
Net income
+
2¢
Road
Safety
Updated July 20, 2015
In 2013, on a given day in BC…
716
54
crashes
vehicles vandalized
Updated June 27 2014
232
people injured in a crash
(4 cyclists and 6 pedestrians)
17
vehicles stolen
35
vehicles broken into
$11M
in claims
payments
Rising claims costs
net claims incurred costs
($ millions)
3,600
3,200
2,800
2,400
2,000
1,600
1,200
800
400
0
2010
2011
2012
2013
2014
Updated July 20, 2015
Material Damage and Other
Injury
source: ICBC financial systems
7
Auto crime on the rise for the first time in a decade
17%
31%
Source: http://www.icbc.com/about-icbc/newsroom/Documents/auto-crime.pdf
http://www.icbc.com/road-safety/prevent-autocrime/Documents/Auto-crime.pdf
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So, what are we doing about it?
Improve claims
handling
Partner with health
care providers
Claims information
campaign
Enhanced
translation services
Combat fraud
Insurance Fraud
• Two types of fraud (~50/50 split):
• Planned
• Opportunistic
• Total auto insurance fraud in Ontario estimated between 9 to
18% of annual claims costs ($116 to $236 per policy in 2010)
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(From: KPMG Forensics (June 13, 2012). Auto Insurance Fraud in Ontario. Toronto, ON: Insurance Bureau of Canada.)
• Magnitude of fraud estimated from:
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Industry Reports
Closed Claims Studies
Data Analytics
Opinion Surveys
Auto insurance fraud in BC
• What’s different in BC?
• Public auto insurer mandated to insure all comers
• Full tort province – potential for higher payouts
• Higher Third Party Liability Limits
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Challenges
• Fraud difficult to detect
• Varied adjuster experience and expertise
• Information sharing restricted
12
What ICBC is doing
Prevention
All Claims
1
13
Deterence
2
Detection
3
Enforcement
4
Our Strategic Directions
Deterrence:
• Perception of counter-fraud action
• Awareness of impact of fraud
• Fraud as socially unacceptable
Detection:
 Detection tools
 Fraud knowledge
 Employee training
Focusing in on Fraud
Enforcement:
 SIU scope and productivity
 Case management
 Prosecution
Prevention:
 Application of knowledge to prevention tools
 Strategic Partnerhips
 Contractual provisions
Fraud investigations
• In 2014, ICBC:
• Received more than 900,000 claims
• Invested $7 million in loss management programs
• Opened more than 6,300 fraud investigations (includes
claims and licensing)
• Conducted over 2500 Cyber Investigations
• Laid 46 charges
15
Our Partnership
• Initial RFPQ for Private Investigators issued in 2012
• Resulted in selection of 25 qualified pre-approved firms
• New RFPQ issued in 2015
• Resulted in selection of 33 qualified pre-approved firms
• Continued relationship between ICBC and PIABC
• Industry liaison group to be utilized to promote open
dialogue, discuss industry concerns and pressures, and to
share ideas
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Thank you!
John Wood
Senior Director
ICBC
John.Wood@icbc.com
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questions
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