Insurance Age

Insurance Age: "Web-based tool aims to deal with contract fraud
Andrew Foxwell
A new web-based tool has been launched to help brokers and insurers tackle the serious problem of employee and contracting fraud facing the industry.
Fraud-i aims to educate employees in medium to large organisations using online education and subtle electronic questionnaires to discover where the theft is taking place.
This could be crucial in tackling kickbacks, advantageous loans given by brokers to friends and misappropriation of insurers' funds; just some of the issues plaguing the industry, according to Fraud-i co-founder Allan McDonagh.
Mr McDonagh, a security expert and former fraud investigator, claimed that Fraud-i would seek to stop this endemic trend: 'Corporate fraud is the largest unmanaged organisation risk today, costing businesses typically between 2-5% of total sales.
'Companies spend huge sums of money in protecting the business against disasters, especially in the wake of 9/11, yet senior management often ignores the threat posed by corporate theft and corruption, which is much more likely to bring down a business.'
He added that consolidation among insurers meant larger contracts for many items such as catering and gardening were now the responsibility of just a few people in positions of trust.
While the set-up costs of the system would not be regarded as cheap by smaller companies, negotiations with two large household insurers are at an advanced stage, with installation expected to take place soon.
Simon Imbert, Fraud-i's other co-founder, stressed brokers would be able to take advantage of lower premiums when selling fidelity insurance, which protects businesses from employee theft.
He said: 'Looking a year or two down the line, if companies adopted Fraud-i as part of a counter-fraud initiative, t"