VFM Services, the desktop counter fraud services provider, has revealed the level of travel fraud is rising at an alarming rate, with over four in ten (45%) claims investigated uncovered as being fraudulent.
Analysing travel claims data for the last 12 months, VFM revealed a 190% increase in cancellation claims, and 140% increase in baggage claims.
Sally Griffiths, Director VFM Services, explains: “Often people buy travel insurance as a one off, or as part of a holiday package, so there isn’t as much loyalty compared to other types of insurance. People are more tempted to try and fraudulently claim on their insurance, as they believe there’s more chance that they will ‘get away with it’ and less chance of it affecting their premium in the future. Claiming on their travel insurance doesn’t affect their renewal, so people often feel like they are entitled to claim, as they’ve paid out for the premium in the first place.
“We also see a correlation with the dip in household claims volumes in the summer months, which can be attributed to the fact that people are claiming for items on their travel policies instead of affecting their household insurance.”
The average claim on a travel insurance policy for cancellation is £1,200, and for lost or damaged baggage is £360.
Sally Griffiths continues: “Travel insurance claims tend to be very low value, but the volume of claims are significantly increasing, it’s important that insurers still apply the same stringent fraud detection measures, as it has been proven that people will fraudulently claim if they think they can, and there’s no consequences for their actions.”
VFM is the pioneer of the conversation management technique, central to which is the Treating Customers Fairly philosophy and the need to identify and validate genuine claims quickly whilst effectively identifying and managing fraudulent claims.
Griffiths concludes: “We have an ROI on travel claims of a minimum £5 for every £1 spent, so quality counter fraud training and outsourcing to experts who will effectively manage those claims is worth the investment, to help deter fraudsters and try to halt the increase.”