SIU Today Fall 2021 - 14

Coalition Update
By Arinze Ifekauche
The Coalition Sees Unexplained Activity
in Workers Compensation, Arson, and
Auto Claims Amid COVID-19 Lockdowns
The Coalition Against Insurance Fraud recently released a trend
analysis detailing the potential impact COVID-19 has had on
fraudulent claim referrals from the Fall of 2020 to the Spring of
2021. The Coalition's COVID-19 Insurance Fraud Impact Study
featured responses from 37 state government agencies tasked with
investigating and fighting insurance fraud. The study also included
17 agencies responsible for investigating potential fire losses.
The Coalition has a long history of executing collaborative
projects with its membership. On the subject of COVID-19
specifically, a number of our member departments of insurance
and law enforcement agencies responsible for fraud investigations
participated in the study. In 2020, the Coalition partnered with
IASIU and others to host a COVID-19 webinar focused on the
urgent need to prepare for a pandemic-induced surge in fraud
activity. The event was attended by 3,000 people and is the largest
anti-fraud event in U.S. history.
The goal of the trend analysis was to capture in real-time the challenges
presented by the pandemic and how insurance scammers may have
exploited those challenges. Coalition members need to understand
from a claims referral standpoint, if the suspected fraudulent claims
volume was impacted immediately-and if so, in which sectors.
In a two-part survey, the Coalition reached out to state anti-fraud
representatives across the U.S.-first in October of 2020 to set a
baseline, and then a follow up in April 2021, to compare and contrast
any changes.
The April 2021 survey included a separate survey of state fire marshals
across the nation. Major news outlets cited a sharp increase in arson
fires reported by the FBI in the first six months of 2020, with a 19%
jump nationally and a 50% increase in cities with populations of over
1 million people. Similarly, state fire marshals responding to the study
reported increases in the volume of arson fire investigations they
received during the the pandemic.
Responses were collected from 37 agencies in both Part 1 and Part 2
of the survey. In addition, 17 fire marshals participated in the second
part of the survey. Take a look at some of the key findings:
DRIVERS STOPPED DRIVING BUT POTENTIALLY
FRAUDULENT CLAIMS KEPT COMING
* In April of 2020, international consultancy, KPMG, released
a study that measured a stunning 64% drop in vehicle miles
traveled.
* Despite this drop, respondents indicated the number of fraud
referrals related to auto give-ups, auto claims, and staged
accidents reports remained " about the same'' throughout the
pandemic.
Fraud fighters should note the lack of any statistical correlation
between a 64% decrease in driving and virtually no decrease in autorelated
insurance fraud referrals. It remains to be seen how a dramatic
drop in vehicle miles traveled could yield " about the same " amount
of fraud referrals.
14 SIU TODAY | FALL 2021
http://insurancefraud.org https://insurancefraud.org/wp-content/uploads/Updated-COVID-19-Insurance-Fraud.pdf https://www.npr.org/2021/02/17/968577358/officials-see-an-increase-in-arson-fires-during-coronavirus-pandemic https://www.fbi.gov/news/pressrel/press-releases/overview-of-preliminary-uniform-crime-report-january-june-2020 https://advisory.kpmg.us/content/dam/advisory/en/pdfs/2020/automotives-new-reality.pdf

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