Posted: 13/09/2024
Partners Mark Lee and Joanne Vengadesan attended the Innovate This 2024 conference on 11 September 2024, an in-person event for insurers, insurance distributors and insurtechs working in the travel and health industries. The overarching theme of the conference was ‘Exploring innovation in travel and health insurance’, and Mark and Jo were invited to lead on a specialised workshop for attendees, titled ‘An interactive discussion on the challenges of sharing fraud data in travel insurance’.
The session explored how the travel insurance industry can collaborate more effectively in cases of travel insurance fraud, including looking at the different types of legal challenges surrounding data sharing in the industry, and assessing the various types of fraudulent cases in travel insurance.
A key topic discussed in the session was the lack of a travel insurance fraud database in the UK. A database has been considered historically, but has never been created, mainly due to concerns about the cost (given the lower margins in travel), potential data sharing/GDPR challenges, and the perception that some insurers may gain a commercial advantage. As a result, there is currently no data sharing among travel insurers to identify repeat fraud.
It was recently suggested that 85% of travel fraud is being committed by ‘opportunistic’ holidaymakers, seeking a way to recoup money for their trip, with holiday costs having increased by 25% since the COVID pandemic.
The question was raised as to whether there is sufficient appetite among insurers to pay for the cost of setting up and running a database to identify the smaller proportion of criminally organised fraud that targets multiple insurers. Possibly not – but this percentage, of opportunistic versus organised criminal fraud, will likely change in the future, particularly as fraudsters become more sophisticated with the use of deep fake technology on a larger scale.
There is renewed interest, at least amongst some insurers, to work out how to best tackle this, with some in discussions with third-party providers about their capability to create a travel-specific fraud database. However, this will only happen if enough insurers commit to sharing the cost involved in developing and managing the database, and if fears that this may be anti-competitive can be overcome.
Rather than creating a new database, it was suggested a more cost-effective option might be to add the data to an existing fraud database – for example, the Insurance Fraud Register or the Insurance Fraud Bureau.
Another alternative option could be that insurers place greater reliance on tech products to provide reports on key data relating to their own claims, with a red flag system identifying if a similar or identical claim has been lodged with another insurer.
It was noted that the travel industry has made some recent progress, with numerous travel firms having signed up to an anti-fraud intelligence hub to counter organised crime, called ‘PROFIT’ – Prevention of Fraud in Travel. This is a web-based encrypted database of fraudsters, which contains supporting documents and information and allows for matches with other databases. The database is overseen by a third-party company retained for this purpose.
Can the travel insurance sector also overcome historical challenges and create something similar? Given the anticipated growth in organised criminal fraud activity, there is now a necessity for travel insurers to put aside their concerns and commit to data sharing – in one form or another.
© 2024 Penningtons Manches Cooper LLP.
All rights reserved.
Website design by Frontmedia / Dynamic Pear
Penningtons Manches Cooper LLP is a limited liability partnership registered in England and Wales with registered number OC311575 and is authorised and regulated by the Solicitors Regulation Authority under number 419867.
Return to news headlines 
