travel insurance claims - fact or fiction · 7 international headlines 20% of travel claims are...

1

Travel Insurance Claims - Fact or Fiction

2

Quick Snapshot of Today’s Topics

▪ Travel Insurance: Is it a soft target for fraudsters?▪ Survey of Our 2018 UStia Conference▪ International Headlines▪ Common Schemes▪ More Frequent Hotspots and G4S Heat Map▪ Social Media & Technology ▪ Travel Fraud Indicators▪ The Devil’s in the Details▪ Investigating the Travel Claim▪ Case Examples

3Travel Insurance Investigations

- 2013 – More than 148 Million Covered by Travel Insurance.

- 2016 - Americans spent nearly $2.8 billion on all types of travel protection.

- Approximately 42.6 million American insureds were covered by a travel protection plan

4

By 2020 the top three destinations for travelers will be:

- Europe (717 million) East Asia (397 million) Americas (282 million)

The Numbers

5

Why is travel insurance fraud considered a soft target compared to other types of insurance fraud?

▪ The incentive for travel insurance fraud is not an external issue. Fraudsters are usually trying to recoup/offset the cost of their trip.

▪ Potential fraudsters are under the impression that travel insurance fraud is not a serious offense like other types of insurancefraud. Cheating a travel insurer is seen as ‘stretching the truth’ more than a criminal offense.

▪ Travel insurers have tighter margins and lower premiums – harder to invest in an elaborate, lengthy fraud detection process.

▪ Due to the competitive nature of this business, less information is obtained from customers It is also much easier to obtain a travel insurance policy.

▪ Incidents (upon which claims are made) usually occur in uncontrolled/variable and undocumented environments (for example, overseas). The variables are also much harder to validate(for example, the contents of a lost bag).

▪ The insurance industry’s anti-fraud focus has so far mostly been in auto or personal injury. Fraud detection in travel insurance is not so well formulated, but is getting better.

6

Let’s See What We Think As A Group

1. What percent of travel claims are fraudulent?

▪ <10% ▪ 10 to 20% ▪ 21 to 35% ▪ 36 to 50 % ▪ >51%

2. What percent of travel claims are totally fabricated?

▪ <10% ▪ 10 to 20% ▪ 21 to 35% ▪ 36 to 50 % ▪ >51%

3. What percent of travel claims are significantly inflated?

▪ <10% ▪ 10 to 20% ▪ 21 to 35% ▪ 36 to 50 % ▪ >51%

4. What percent of travel claims are identified by the claim handler as suspect?

▪ <10% ▪ 10 to 20% ▪ 21 to 35% ▪ 36 to 50 % ▪ >51%

7

International Headlines

▪ 20% of travel claims are fraudulent▪ Australian Institute of Criminology

▪ 25% of travel claims are fraudulent▪ Association of British Insurers

▪ 47% of Brits surveyed reported they had committed travel insurance fraud▪ Association of British Insurers

▪ "As the number of people taking up travel insurance rises, so too has the incidence of people making false or inflated insuranceclaims. The insurer has seen a 130 per cent increase in such claims.”

▪ Global head of claims for major travel insurer

▪ “Nearly eight million people in the UK alone have made a claim on their insurance that was fraudulent in some way, with five per cent of those people fabricating their claim completely, and 15 per cent inflating the value of their claim. And that number is rising all the time. We are looking at a scam that’s costing the industry millions.”

▪ Major UK Travel Insurance Co

8

Blog – Compareholidaymoney.com“Despite the number of fraudulent claims being made, travel insurance providers believe that nearly two thirds of all fraudulent claims are uncovered”.

9

The majority of travel insurance claims are genuine.

10

Common Schemes

Examples of such fraud include:

▪ Claiming for losses, incidents, accidents that never occurred;

▪ Overstating the amount of loss during a real incident;

▪ Changing the circumstances of a loss to enable a claim. i.e. date of loss;

▪ Deliberately manufacturing an incident to enable a claim;

12

▪ Include the man who claimed for the cost of having his appendix removed while in Cyprus. Further investigation revealed, however, that he had made the same claim on eight previous occasions.

▪ Or the woman who claimed on five separate occasions for the loss of the same eye. The cause of the alleged injury ranged from being attacked to jumping into a swimming pool.

▪ Opportunists are never far from the spotlight. A traveler in West Africa filed a claim for recuperation costs after recovering from a heart attack while on vacation. The bill actually was for the cost of visiting a local brothel.

▪ The 26 year old traveler visiting family back in India that alleges a heart attack and hospital in patient treatment and is quickly reimbursed more than $25,000 dollars with little confirmation of the event and charges, only to file a very similar claim the very next year when he visits again, but this time wants more than $45,000 in reimbursement for medical expenses of inpatient treatment, diagnostics, testing, and medications.

Some Notable Serial Claimants

13

Fraud Hot Spots

EuropeSpain, Greece, Croatia, France, Italy, Turkey, Portugal

Middle EastLebanon, Turkey, Jordan, Egypt, Iraq, Iran

Sub-Continent India, Pakistan, Sri Lanka, Nepal

Other Locations in AsiaThailand, Indonesia, (Bali), Laos, Vietnam, Cambodia, Philippines

The America’sCanada, Central America,Mexico, Brazil, Venezuela, Colombia etc.

AfricaNigeria, Ghana, Cameroon, Kenya

14

G4S Travel Claims Data MappingP: Property M: Medical: A: Accidents D: Dental

15

Major Loss InvestigationsRecovery & SubrogationProperty MedicalDental ClaimsIntelligence / Data Mining Desktop Investigations

16

Social Media and Intelligence Based Investigations

19

Sir Walter Scott, Scottish author & novelist (1771 - 1832)

Oh what a tangled web we weave, When first we practice to deceive!

20Preparation & Communication!

21Property Claims

22Medical Claims

23Dental Claims

24Major Loss Investigations

26

Investigations – It’s Not Just About Suspected Fraud

▪ Not all investigations are about fraud. We undertake a lot of investigations to understand the circumstance of accidents and look at potential recovery.

▪ Does anyone remember the tennis player Vitas Gueralitis who tragically died in a friends NY apartment…many years ago.

▪ “A pool mechanic's failure to install an extra $1.44 worth of plastic exhaust pipe led to the death of Vitas Gerulaitis, the tennis player, as he inhaled carbon monoxide fumes from a new $8,000 pool heater last year, Suffolk County prosecutors said today”.

▪ "It sounds hard to believe, but had the pipe been two feet longer, we wouldn't be sitting here today, and Vitas Gerulaitis would still be playing senior tennis."

27

Investigations – It’s Not Just About Suspected Fraud▪ And of course just two weeks ago we hear about tragic case of a US family in Mexico who appear to

have died accidently from gas fumes in their rental while on vacation.

▪ Phil Peart who is here today handled a very similar case last year in Romania. A family had not been back to their holiday home for about three years, and had only been back visiting for four days when tragedy struck…..

▪ The authorities never looked for the root cause, they just relied on the ME Reports.

▪ B A R S

▪ B O O Z E

▪ B O A T S

▪ B I K E S

▪ B E A C H E S

▪ B A L C O N I E S

T H E S I X B ’ STHE KEY RED FLAGS

29

• Part of an organized tour (Top Deck/Contiki etc)

• Late night Incident - (Travel by day - Party by night)

• Meets established criteria (major falls/nightclub/bars)

• Occurred in a hotel/resort (pool, balcony, altercation)

• Occurred in a nightclub / bar or shortly after leaving

• Lack of witnesses when incident was in a populous location

• Incident result of building defect (handrail/balcony/collapse)

• Major incident but it is not reported to the police

• Occurs in Hotel/Resort but not reported to management

Potential High Risk Scenarios

30

Early Intervention is so Important

• Quickly Identifies Policy Exclusions• Gather Critical Evidence• Physical Evidence, CCTV, Witness Statements• Assess Potential Subrogation & Recovery• Immediate Cost Saving Benefits• Quick Decision Making Builds Brand Recognition

31

First Notice of Loss - Taking the Call…

Could be from anyone, anywhere and relate to any type of claim

32

Stay Calm…Relax

33Claim Review & Preparation

34

Conducting Initial Review

• Is there sufficient detail to accurately understand the event?

• Does the claim contain all the relevant information?

• Is the claim “overly informative” with documentation?

• Does the event seem plausible?

• Do the claimed items fit the event?

• Does the itinerary match the location of the alleged incident?

• Do the claimed items match the length of travel?

• Do the claimed items match with social profile of the claimant?

• Are the values of the items consistent with market prices?

• Does the claim contain the appropriate police / other reports?

35

Travel Fraud Indicators

The Claim: • Circumstances inconsistent with the claim• The value of the claim relative to the planned holiday• Incomplete/inconsistent or falsified documentation• Items stolen could not fit into the luggage described• Age/condition/quality of items not consistent with lifestyle• Receipts have no store logo/tax id or contain apparent alterations• Incorrect phone number/typographical errors/email address

The Insured: • Reluctant to provide specific incident details• Loss detail inconsistent with lifestyle/occupation• Appointments avoided or continuous last minute delay for interview• Over-pushy for a quick settlement

• Will take less to settle quickly• Unusually knowledgeable about the claims process

36

“If we were supposed to talk more than we listen, we would have two

tongues and one ear.”

FamilyFriends

Providers

Suppliers

Fraud is all about “connections”

38

Priority, • Show Empathy• Engage & Listen• Build Rapport• Earn their Trust• Let caller tell their Story• 80% should be the Caller• Ensure you take detailed notes• Assess, Evaluate and Act• Refer to the Red Flag Guidelines• Review Internal SOP’s -• Potential Exposure/Costs• Liaise with Team Leaders

39

Visualize what is being said…

Bring your notes to life…Turn your notes into a picture

40

Rod Stewart had it right when he said….

41

Insured

There is a Story with every claim…. AND there is ALWAYS a Back Story

Friend

Barman

CCTV

Hotel

42

• What occurred days, hours or minutes before...

• Who, What, When, Where, Why and How

• Is the Event Plausible?

• Is it Consistent with the other evidence?

• Traveling Companions, Friends, & Witnesses

• Medical & Property

• Facilities, Treatment, Receipts, Police Reports, Location?

• Accidents

• Other Vehicles, Motorcycles, Buses, Trains

• Third Parties (People, Equipment Failures)

Understanding the Back Story

43

As Investigators…

…we can never have enough information

44

INSURED

Friend

Barman

Hotel

Bike Rental

Police

Tour Guide

To fully understand the incident…You must try and join as many dots as possible…

45

Investigating the Claim

46

Our investigators attempt to cover all aspects of the claim, locally and internationally.

Interview ProceduresWhen conducting an interview with the insured, ensure the only persons present are the insured, interpreter (if required) and the investigator. Do not allow other family members to sit in on the interview as they may have claims pending as well (same insurer or another).

Personal DetailsEnsure to obtain the full name and address of the claimant and include all contact telephone numbers inclusive of mobile, private, and business. Email accounts and addresses used.

Employment HistoryObtain full personal particulars of claimant and include occupation, employer and length of employment over the past 5 years.


47

Passport InformationObtain full details of all travellers’ on the said journey.Sight and note entries in the passport of the insured to ensure the dates correspond with the journey and location claimed by the insured.

Note other country / exit as this is important when discussing previous claims.

Note: Some insured’s move around various insurers year to year lodging claims each year of travel so it is important to sight passport activity and then ask the insured about prior claims history.

Photocopy or photograph passports if possible.


48

• Have they ever had a similar illness?• If so, when and did they lodge a claim?• Who was the insurer?• How much was the claim for?• Which hospital was it?• Date when this illness / accident occurred?• Where did the incident occur?• Accident – were there any witnesses?• Were the Police called?• Was anyone else injured?• Whose vehicle / place was it? (Potential recovery)• How was the insured conveyed to hospital / clinic? (Friend or Ambulance)• Were they admitted immediately?


49

•How did they find out about the hospital / clinic?• What paperwork did they fill out prior to admission?• Who initially treated them at the hospital / clinic?• Did the insured, family or friends know this Doctor?• Were they admitted to a ward?• Describe in detail the hospital / clinic?• Full Address details - Size 1, 2, 3 story etc• Location in Street / Suburb (near rail / bus / shopping centres)• Color of the building• How many patients were there during insured’s stay• Number of Wards & Number of Doctors• How many beds in the claimant’s room


50

• What facilities were in the room? (kitchen / shower / toilet)• Was it a 24 hour hospital / clinic?• What were the operating hours?•Was the claimant attended to during the night?• What did the claimant do for food?• Were they given an IV (check on Receipts?)• Which arm / hand did the IV go in?• Did the claimant have any visitors?• What type of medicines was provided?• Describe the tablets / medication (color, size etc)• Who administered the medicines – Doctor or Nurse?• Describe the treating Doctor - Age, Gender, physique etc


51

• When they were discharged, who completed the paperwork?• Who provided the medical receipt?• How did they pay for the treatment?• Provide proof of payment• Does the hospital have a copy of the receipt provided by the claimant for this claim? • How did the insured get home from the hospital / clinic?• What follow-up treatment did they have?


52

LOST OR STOLEN LUGGAGE or PERSONAL ITEMS

Obtain specific details of the number of bags, cases and hand luggage carried by each member of the travelling party.

As an investigator it is vital that you ascertain the size of each bag • (i.e. 24in x 40in x 10in).

This is important as we analyze the claim and work out volume and quantity of items stolen.


54

Receipt – Submitted with Claim

Simple Claims Fraud

55

Document Validation by our Office

56

Photoshop…

58

Property Claims

Manufactured Evidence

59

Property Claims

60

• Handwriting and Signatures

• Compare Claim Form, Receipts and Documents

• Dates on All Documents - Correspond with Travel

• Type and Time of Incident

• Location of Incident

• Witnesses

Handwriting and Signatures…On ALL Documents

61

Check the Evidence - Handwriting….

62

Remember to check the Handwriting….Claim Form

Receipt for Insurance Company

63

TONG TANG CHOW

You must know who you are dealing with…?

KYC….it is a must

Organized Fraud

64

Verification is a MUST…

TANG

65

Document Verification

TONG

66

Document Verification

CHOW

67

mailto:[email protected]

68

Multiple Claims & Multiple Insurers - USD$100k+

69Travel Insurance InvestigationsOrganised Fraud

70Medical & Dental Claims

72Timeline – Missing Links

73Medical Tourism – Nose & Teeth

74Evidence is in the Claim Form

75No Fall ~ Cosmetic Dentistry

76No Fall ~ Cosmetic Dentistry

77Evidence is in the Claim Form

78

Leg Work - Koh Chang Thailand February 2018

79


Insured ~ Definitely wearing a Helmet - Friend took it off me at the scene

80

Leg Work Koh Chang Thailand February 2018

81

Leg Work - Koh Chang Thailand February 2018Same Shorts and Bike and Friend…no helmet

82


83

Corruption and Kickbacks

• Personal connections are essential to protect ones interests. However, these connections must have true depth. Merely "knowing" someone won't do.

• Corruption is widespread, but it is the petty corruption that is most damaging because it is so pervasive.

• Vaguely worded laws give poorly paid civil servants vast discretion. Thus, the granting of a license or approval or the completion of required paperwork becomes a favor, for which some favor in return is required.

• The practice of paying government workers for their services is endemic in Thailand, the Philippines, China, Vietnam, and especially Indonesia, and the speed of service depends on the bribe offered.

• *Michael Backman – Asian Eclipse

84

False/Altered Document

▪ Fake documents are used at an extensive level in the developing economies like China, India, Bhutan, Pakistan, Nepal, and other similar countries, though they are also quite prevalent in the more developed countries like US, UK, France, and Australia.

85

▪ Bangalore Police uncover huge fraudulent documents racket.

▪ “You name it, they have it.” ▪ Police Commissioner Shankar M. Bidari.

86

Remote Police Station - Kickbacks or Known to Insured?

87

Facilities without the Equipment

88


89


90

Stores which do not stock claimed Items

2018 - Preparing for the Summer

• Spain Running of the Bulls - July - August

• Ibiza – April > October

• Greek Islands – April > October

• Croatia – Sailing/Cruising – April > October

• Prague - April - October

• Germany Oktoberfest– October

• Tour Groups

• Mexico – Cancun/Cozumel/Cabo

• Asia All Year Round

92

Thank You

Larry Henning, CFE CIFISenior Vice President

G4S Compliance & [email protected]

Mobile – (336) 830-9660Office – (800) 927-0456

mailto:[email protected]