The majority of brokers feel penalties for insurance fraud should be higher and have called for a central database of fraudsters, research has found.
A survey of brokers by Groupama Insurances found brokers felt the insurance industry should be sharing more information to tackle fraud and that brokers have a key role to play in this process.
It found 93% of brokers felt penalties for fraud should be higher as a means to deter fraud, while 95% felt the industry should share more information to combat financial crime.
Asked if they felt a central database of known fraudsters would help deter opportunistic fraudsters, 88% agreed.
Andy Pagett, Counter Fraud Manager at Groupama Insurances said: "This survey certainly indicates that brokers are just as concerned as insurers about fraud. Pleasingly, 72% agreed to the statement that ‘brokers have a significant part to play in communicating counter fraud messages'.
Groupama Insurances said it is exploring opportunities to exchange intelligence to reduce the fraud risk at both front end and claims stage.
"A central data-base of known fraudsters is well underway" said Pagett. "The proposed Insurance Fraud Register (IFR) is currently being worked on as a 'proof of concept' and will be presented to the General Insurance Council in June for sign off and to obtain agreement to fund it. We firmly support this initiative along with any similar moves to enhance data sets such as the CUE Travel proposal."
Over half of brokers (54%) felt more could be done to deter potential fraudsters at point of sale. When asked how the industry could address the perception that opportunistic fraud is acceptable a significant majority - 77% - said they felt that it should be made clear that fraud, regardless of its nature, is a crime.
Furthermore 54% believed that all documentation released to the consumer should clearly state that fraud adds additional cost to insurance premiums.
Andy Pagett continues: "Sadly opportunistic fraud is endemic and half the battle is in changing the perception that it is acceptable to fabricate or exaggerate certain elements of a claim.
"This issue is also self-perpetuating. The higher premiums rise due to a range of factors including fraud, the more likely it is for people to look for ways to claw back their expenditure by inflating or falsifying a claim."
The insurer is currently in favour of proposals to form an industry funded 'Police Fraud Team' within the City of London Force.
