Canadian Underwriter

How to make a good first step in the fight against auto fraud an even better one

September 12, 2019   by Greg Meckbach

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The launch of Canadian National Insurance Crime Services [CANATICS] was a good move in the fight against auto claims fraud, but Canada is still at a disadvantage to other countries, a former police detective and senior Aviva claims executive said Wednesday.

“It’s a great start,” Gordon Rasbach said of CANATICS during a panel discussion at Connected Insurance Canada. “But if you compare it to other countries, [sharing of information within the industry] is still in its infancy [in Canada].”

Rasbach is a former vice president of property claims and fraud management at Aviva Canada.

CANATICS has nine member insurers representing 75% of the Ontario market. It lets member insurers pool their data in order to “connect the dots,” allowing them, for example, to identify a situation in which the same vehicle is insured with three different carriers over several years and is involved in different suspicious claims.

One drawback of CANATICS is that it is voluntary, Rasbach said at Connected Insurance Canada, which was produced by Insurance Nexus and held at the Marriott Eaton Centre in Toronto on Sept. 10-11.

“The biggest hurdle is we are not mandating it,” Rasbach said of sharing information on fraudulent or suspicious auto claims. “A lot of large insurers, probably three of the six largest ones – I am not going to name them – are so uncomfortable [about] actually asking for regulation of the industry because of the regulatory history in Ontario on the accident benefits side, they are just gun-shy. [But] until that happens, this problem will never get resolved.”

In contrast, some states south of the border require insurers to report fraud and fine them if they do not, said Rasbach, who was a Toronto police detective until the mid 1990s. “If they even suspect something, they have to report and it goes into a database,” Rasbach said of insurance regulation in some U.S. states. “By virtue of the legal obligation to do that,  if they start sharing information, and it’s very vague, and they are held to account for it in any kind of dispute, they can say, ‘Well, I did it because I had to. It’s the law.’”

CANATICS right now is focussed on fraud related to Ontario claims that involve crime rings, staged collisions and service providers who fraudulently bill insurance companies for services that were not performed or not needed. It was founded in response to the 2012 release in Ontario of the report of the Auto Insurance Anti-Fraud Task Force.

Some companies who are defrauding the Ontario auto insurers have been around for years, Rasbach said Wednesday. He noted that you did not need cutting-edge use of technology or social media to identify them.

“We’ve got 30 of what I call the serial-killer body shops in the greater Toronto area. If you put the two leading front-line people from every insurer in room, they would agree they are the 30 worst. Probably 20 of them have been around for 25 years.”

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