June 24, 2019 by Adam Malik
Insurers are calling on greater collaboration with law enforcement to help fight auto insurance fraud.
The cost of auto insurance fraud is overwhelming, and no one industry can tackle it alone, Don Forgeron, president and CEO of the Insurance Bureau of Canada, told the annual meeting of the Ontario Association of Chiefs of Police in Toronto on June 24.
In particular, he pointed to the success of Project Raven, a collaborative effort between the IBC and Ottawa police that saw 19 stolen vehicles recovered. Four men were charged as a result, IBC and law enforcement worked together with port authorities in Montreal and Halifax to identify and stop stolen vehicles from leaving on container ships.
“These partnerships send a clear signal,” Forgeron said in the text of his remarks to the police chiefs’ association. “They announce to thieves that moving stolen property is a risky endeavour. We believe that these arrests and recoveries ultimately serve as a deterrent. We hope to strike up a similar kind of partnership when it comes to insurance fraud – both on a day-to-day basis and in terms of large-scale frauds that we identify together.”
The insurance industry also has an important role to play, said Forgeron. He talked of the need for insurers to implement stronger measures against fraud, and noted that insurers have responded by increasing collaboration between them. A recent example is when two large carriers worked together to uncover a “ghost broker” selling fake pink slips to Ontario drivers.
“We see this as a positive development,” Forgeron said. “We are just beginning to understand the many benefits of having insurance companies work together to reduce fraud. We’re spotting trends that we couldn’t see before, when each company was trying to solve this problem on its own.”
The next step would be to create a system that allows companies to share information to help with fraud detection. However, data-sharing is a tricky area, Forgeron admitted. Privacy concerns around data collection and sharing are sensitive subjects, so he wants to see regulators get involved.
Stiffer penalties for fraud would also help deter crime, Forgeron said. “As a society, we need more meaningful penalties against those who commit fraud. And we are taking that message to government and to prosecutors.”
The industry has observed for some time that organized crime is becoming entrenched in insurance fraud. “I’m hoping we can work closer together to uncover and reduce this kind of fraud,” Forgeron told the gathering of police chiefs, “because I’ve seen the benefits that partnerships can bring.”