UK life insurance companies are becoming so concerned at the amount of false claims that they have issued a reminder to would-be fraudsters of the existence of the Insurance Fraud Bureau (IFB), first launched in 2006.

The life insurance industry is worried that the recent high-profile case of ‘canoeist’ John Darwin may have put ideas in some potential fraudsters’ minds, so is keen to nip any such thoughts in the bud before more people go ‘missing’, presumed dead.

Although originally launched to counter the actions of criminal gangs, the IFB soon added investigation of fake insurance claims to its remit. Technical and corporate affairs executive for the British Insurance Brokers Association (BIBA), Graeme Trudgill insists that fake claims damage everyone as they make insurance more expensive, for which we all pay in the form of increased premiums.

Systems have become much more integrated and with the life industry backing the IFB and providing much access to information, Trudgill says that it is easier to spot potential fraudsters. He concedes that life insurance fraud is becoming a problem, but also claims that because the IFB are better able to investigate that anyone thinking of perpetrating a fraud should think twice.

Extensive modelling has been developed to identify potential frauds, and there are much better procedures at claim level to allow insurers to probe further. Systems introduced since 2006 allow analysis of insurance policies and claims records from all the insurers participating in the scheme, and can highlight any suspicious activity. Basically, the bureau can use insurance companies’ records to compare life insurance claims and assess whether they are likely to be genuine, fraudulent, or perhaps the work of an organised criminal ring.

The IFB is going to extensive lengths to catch fraudsters and methods to determine whether claimants are telling the truth include the use of voice analysis software, which can allegedly pick up subtle changes in a caller’s telephone voice. The computer program will identify any nervousness and alert investigators to a potential fraud. But, that is about all that the IFB will reveal about its methods. All other detection methods are being firmly kept under wraps in case they are compromised by would-be fraudsters.

In the wake of the global credit crunch and the rapid deterioration in life assurance valuations, UK insurers will be doing all they can to weather the storm, and that includes mitigating any potential fraud losses - guaranteeing that any claims will be vehemently policed over the coming year.