Brokers blame practice of “fronting” for driving up cost of car insurance in Ireland
Insuring your vehicle can be an expensive business these days.
“Fronting” has been been identified by a group of Irish insurance brokers as one of the most common fraudulent habits accountable for helping to drive up the cost of motor insurance in this country.
“Fronting” traditionally refers to the practice of parents getting insured as the main driver on their son or daughter’s car to avail of a lower premium.
While parents are often genuinely unaware that the practice itself is seen as fraud – and can result in cover being refused or a claim being denied – it is also a practice used by known criminals.
In that instance, the criminal will use someone else to insure themselves as the primary named driver on a vehicle and subsequently get added to the policy.
"Fronting" and forged documentation have been outlined by CFM Group, the brokers behind the Insuremyhouse.ie, Insuremycars.ie and Coverinaclick.ie brands, as amongst some of the more common fraudulent methods they come across on a regular basis.
CFM Group say they have invested heavily in anti-fraud measures to stop fraud at the inception stage rather than at the claims stage and will be taking a two-pronged approach to help combat fraud.
Firstly, a “red-flag and points reporting system” - whereby facts and comments made by policy-seekers are cross-checked and assessed - will come into effect.
Points are awarded for a series of “tick-box” criteria and, if an applicant reaches a certain points ceiling, then a red flag is raised and the application will be placed on ‘amber review’ and referred to the anti-fraud detection unit.
The company has also developed a Continuing Professional Development (CPD) accredited, Insurance Institute of Ireland-approved, anti-fraud training course for staff (both of CFM Group and of other organisations).
Commenting on the company’s anti-fraud measures, Gerry Carter, a retired Garda and now Anti-Fraud & Claims Manager at CFM Group said: “Prevention is better than cure when it comes to insurance fraud. While it’s important to comprehensively investigate fraudulent claims, we would argue that it’s even more important to investigate fraudulent applications – if a person doesn’t make it past the application stage, they will never have a policy on which to claim.
“As we reduce and eliminate the number of potential fraudsters being offered a premium, the insurers we deal with are prepared to recognise this with lower premiums for the rest of our clients.
“One in 20 applications will be referred to the fraud unit - a small percentage of these will require further disclosures and a smaller, but important, percentage will be denied cover entirely. While the numbers might seem small, they can make a big difference in the claims courts.”
“There is a small, but arguably growing, cohort of professional fraudster in Ireland that is becoming increasingly adept at staged fraudulent insurance claims,” Carter added.
“The simple fact is that the more fraudulent claims there are, the more insurers will be forced to increase premiums for everyone to recoup losses. The investment of time, money and expertise are all needed if we are to combat this escalating problem.”