Travel Insurance Lacks Fraud-Fighting Data Tool
The travel insurance sector is missing out on a key tool used by other industries to combat fraud and improve risk assessment, according to Dushane Naidoo, a life actuary at Verisk. He highlighted the absence of a market-wide contributory data set in travel insurance, which puts the sector at risk of falling behind.
Speaking at the recent Verisk Insurance Conference, Naidoo pointed out that contributory data initiatives have been successful in various insurance markets for decades. For instance, the US medical information bureau (MIB) has reported a 30 to one dollar return on its service that checks for misrepresentations and omissions.
Fraudsters Shifting Focus to Travel Insurance
As fraud controls tighten in other insurance areas, Naidoo warned that travel insurance could become an increasingly attractive target for fraudsters. Its limited safeguards, compared to other areas, make it a potential weak spot.
A connected data set would offer two main benefits: closing the disclosure gap and enabling more effective fraud investigations. By linking data across a broader population, insurers can uncover relationships and repeated behaviors that are invisible within individual portfolios.
Proof of Concept: Verisk’s ClaimSearch Database
Naidoo cited Verisk’s ClaimSearch database as a proof of concept. This large contributory data set for the US property and casualty market contains over 1.8 billion records from 2,800 insurer contributors, covering 95% of the market. This level of industry involvement demonstrates the perceived value of such initiatives.
Despite the potential benefits, sharing data on a large scale raises concerns about feasibility, competitive edge, data protection, and trust. Naidoo acknowledged these concerns but urged the industry not to let them halt progress. Instead, he suggested using these concerns as design questions to create a secure and valuable data-sharing system.
Travel insurance combines medical, transactional, and claims information, yet it lacks a market-wide intelligence source. This gap persists despite the success of similar initiatives in other sectors.
