When it comes to risk management threats, burglary is pretty low on most insurers’ priority lists. Many carriers are more concerned about preventing catastrophic property losses, fatal motor vehicle accidents and scary liability exposures. After all, how much can a garden-variety burglary loss really cost?
Unfortunately, more than you might expect.
As it turns out, burglary losses may be slowly, subtly draining carriers’ bottom lines according to years of data we’ve compiled. Below you’ll find an infographic that looks at the rising tide of burglary claim trends.
For example, you might be surprised to learn that according to our data, insurance claims for burglary losses …
- Spike during the holidays, tax time and back-to-school season (December, April and September)
- Increase in volume by 15% from January 2010 through February 2013
- Are generally more than twice the value of the actual retail value of the stolen items
- Have an average value of $4,000 when contents are involved
Sound like a modern-day money heist?
We think so too. And in fact, the National Insurance Crime Bureau corroborates our findings. Over the period from 2010 to 2012, there was a 46% increase in “questionable claims” referred to NICB. Not surprisingly, the vast majority of these stem from homeowners: “The three-year average of 72% of these claims was associated with homeowners’ policies, indicating that personal residences were where the majority of these suspicious claims occurred,” NICB reported.
Here are some ideas to stop insurance fraud in its tracks:
- Revisit your settlement process for high-volume, low-value claims. Added focus on burglary claims could bolster your bottom line in 2014.
- Update claim filing automation. Consider adapting your online claim filing process to automate the fraud-detection process and flag any claims that need additional adjuster investigation. You may also want to require claimants to submit proof of purchase for items claimed and a copy of the police report for an added level of verification.
- Train adjusters. Train claims adjusters to know the average retail value for the most frequently stolen items – laptops and rings. Alert them to common fraud indicators. And, step up claim investigation efforts during the months of December, April and September.
- Communicate with policyholders. Educate policyholders about the high cost of claim fraud. You may also want to add to a zero-tolerance fraud policy to your website.
- Retain honest policyholders. While you’re busy stopping fraudulent policyholders, don’t forget about those who are loyal and honest. Use the data available to you to reward and retain your best customers.
For a more in-depth look at these trends, please turn to my article published in Claims Management magazine.