Frontline feeback from John Sims, Chief Executive Officer, Lorega

Everywhere I go at the moment brokers are talking about the likely increase in fraudulent claims in light of the credit crunch.

But we can minimise this social scourge. Loss Recovery Insurance helps insurers fight fraud and keeps Brokers’ loss ratios down while maintaining their reputations. No broker wants to be associated with a fraudster; it simply isn’t good for their business.

Lorega adjusters will spend much more time with the client than an insurer’s loss adjuster as part of the hands on service Lorega provides. For the honest claimant this is a welcome service that removes time consuming hassle. But not for the fraudster as even the smartest crook is likely to slip up at some point during the ‘claim’. As a result the odds that a spurious claimant will make a mistake – and that it will be spotted – are very much higher.

A recent Post Magazine article entitled ‘Watch out there’s a fraudster about’ concluded that HNW insurers are particularly vulnerable and need to do more. When I look back to my Chubb days and the beginning of Masterpiece in the mid 1990’s, I do wonder whether the ‘no proposal’ and ‘no warranties’ route was the right move. While very popular with the brokers it also potentially opened the door for the fraudsters. Do HNW insurers need to revisit this in 2008? I think they probably do to some degree. Perhaps they should start with a declaration from clients and limited warranties that at least allow them some leverage when the client is clearly less than bona fide.

Let’s hope the credit crunch eases before I next put pen to paper. Or is that finger to keyboard these days.