A day in the life of a fraud investigator

Instinct also guides me in my work. If I have a bad feeling, I believe I have it for a reason. It usually turns out that I was right.

Deception, fraud and scams are as old as the history of modern man. Financial fraud certainly proliferated with the appearance of the first money, and insurance fraud with the first opportunities for insurance. In this article, I will briefly reveal how we prevent and detect them at Zavarovalnica Triglav.

From Hammurabi to the present day

Even in the first known Code of Hammurabi (18th century BC), the rules for insurance were clearly defined. Despite the fact that they are significantly more precise today, hundreds of billions of euros worth of insurance fraud are said to occur annually. An interesting piece of information comes from an American insurance agency, which reports that companies and consumers in the USA alone are defrauded of approximately 300 billion euros. The figures here are not so high, but in Serbia alone, where I work and which is a significantly smaller market within the Triglav Group than Slovenia, we uncovered 1.5 million euros worth of fraud last year. Fraud has always existed, and it always will. What changes is the form it takes. As that evolves, so do we – the experts who tackle insurance fraud.

When curiosity is an advantage

Even as a child, I was interested in many things, and that's still true today. I love puzzles, which is why when faced with a damaged car, a broken computer, or while reading, I always prefer to ask myself: why? That instinct, combined with a data-driven mindset, is essential in my line of work. Statistics show that as many as one in ten claims could be fraudulent but undetected. Sometimes, we only discover the fraud when another insurer requests information long after the fact. Some fraudulent cases show no signs of foul play at first glance, but evidence emerges later. Preventing losses from fraud requires a multi-layered approach. We aim to stop it before it starts – for instance, by improving internal procedures. One example: if we find that a client already has home insurance with another insurer, we may choose not to issue another policy. I firmly believe that the more proactive we are, the less likely people are to attempt fraud. The same principle applies when detecting cases that have already occurred.

From deception to fraud

The first to encounter potential fraud are usually our loss adjusters, who are fortunately very experienced. If they identify anything suspicious, they refer the case to us immediately. What do we look for? Frequent claims and claims submitted very soon after a policy has been taken out are among the red flags. But it’s also true that some seemingly suspicious cases turn out to be perfectly legitimate. When I take on a case, I use a variety of tools to confirm or rule out fraud. A key part of the process is visiting the site of the incident, where I speak to witnesses and policyholders. We also rely on specialised software, claim documentation and publicly accessible databases. We cross-check information with other insurers and government institutions such as the police, healthcare organisations and the courts. Technology also plays an increasing role. Many modern vehicles contain chips that store data on when, where and how fast the vehicle was driven. Urban areas are widely covered by surveillance cameras. It’s not uncommon for perpetrators to incriminate themselves – for example, by livestreaming the incident on social media while later giving a false statement.

Who are the fraudsters?

Most investigative cases are quickly clarified. Above all, I know that the perpetrators are not always the villains we imagine them to be. The possibility of greater earnings or financial distress, when a hard-earned car needs to be repaired, pushes many people into irrational behaviour. When confronted with undeniable proof of fraud, individuals often express shame, offer apologies and retract their compensation claims. Others would argue until they drop; some even break down in distress. It also happens that I feel sorry for someone, I even console some clients. At the same time, nothing goes against the rules. These are there to be respected. We must certainly not point fingers at clients. I adhere to the rule that I always start from the assumption that clients are honest until proven otherwise. However, I also encounter a third type of perpetrators. These are organised and cause the most damage, and are therefore the most dangerous. They are well acquainted with modern methods of fraud, are not aggressive, but simply bring their lawyer to a meeting with us. An advantage in my work is undoubtedly the experience from the car workshop where I helped my father and later in my job as a loss adjuster. All experience always comes in handy.

Myth of the fraud investigator profession

Colleagues imagine us as internal police. When we call them, they are afraid they have done something wrong. But our department is only here to help. We take care and strive to be exposed to as little risk as possible, both before and after the policy is issued. With rules for preventing fraud, we ensure that we are safe and protect the interests of the company, and thus ourselves and our clients. Of course, anyone can make mistakes, but precisely to minimise the possibility of their occurrence, we have established protocols. We adhere to these. With the help of series like Netflix's Ozark, an exceptional series about fraud in a small American town, I maintain my fitness for understanding the human psyche. I am interested in how it works and, above all, what a person is capable of doing. However, I am aware that it is not good to judge people by their outward appearance. My colleagues and I are always interested only in facts and material evidence. Fraud is theft from the insurance company, and that is how we treat it.

Why is it important that we are successful?

I anticipate that instances of fraud and attempted deception will continue to rise as more people face financial hardship. So, there will certainly never be any rest for us fraud investigators. Inattention is therefore not a luxury I can afford. It is essential for the security of the company, employees and clients that we uncover as much fraud as possible. The money that the insurance company pays out for an undiscovered fraud must be covered from other sources. One of them is an increase in premiums, which is consequently paid by all policyholders. This is why I firmly believe we need to keep track of new types of insurance and anticipate every scenario that can spring from the human imagination. Only in this way will we be able to detect and prevent as much damage as possible. Last year, for example, we did quite well: in 133 cases, we detected 61 frauds.

Mobility at Triglav

I was born in Slovenia, and I completed my higher education in criminology in Serbia. My career began in 2009, working as an adjuster/liquidator for claims at Triglav Osiguranje in Serbia until 2014. Following that, I spent five years as an investigator in SPORP (Service for Prevention, Detection and Investigation of Fraud), also for Triglav Osiguranje. Through an internal mobility programme, I then had the opportunity to move to Ljubljana, where I stayed for nearly three years. Following the same mobility principle, I returned to Belgrade. Even though I work in Serbia now, I often attend meetings and training sessions in Slovenia. I believe that mobility is an excellent opportunity because it simply offers new perspectives on work, new environments and fresh insights. It's crucial for fraud investigators within the Triglav Group to stay in touch and share experiences, as fraud patterns often migrate across the region. Finally, instinct also guides my work; if I have a bad feeling, I trust there's a reason for it. Usually, it turns out I was right.

Darko Božić is fraud manager at the Fraud Prevention, Detection and Investigation at Triglav Osiguranje in Belgrade.