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Fred Lohmann Director – Field Operations
Southwest Region
NICB Key Facts • 1,100 P&C insurance companies, rental car
companies and self-insureds • 100-year history of established cooperation with
federal, state and local law enforcement agencies • Non-profit organization • Corporate Headquarters – Chicago • 2015 Revenue – $49M
NICB Mission • Mission: To lead a united effort of insurers,
law enforcement agencies and representatives of the public to prevent and combat insurance fraud and crime through Data Analytics, Investigations, Training, Legislative Advocacy and Public Awareness.
NICB Business Model
NICB Priorities
• Medical Fraud • Commercial Fraud • Vehicle Crime
Medical Fraud – What We Are Seeing
• Unsupported Durable Medical Equipment • Misuse of Acupuncture with Electrical Stimulation • Overbilling MRI Testing
Medical Fraud – What We Are Doing
• Major Medical Fraud Task Forces • Aggregated Medical Database
Medical Fraud Task Forces
Task Force Objectives
NICB Aggregated Medical Database • Aggregate medical bill data from NICB members
to apply fraud analytics in order to develop actionable information on suspect providers
• To date, NICB has analyzed: – Hundreds of millions of P&C medical bills – Over $1B in P&C medical procedures
2014 NICB MedAWARE Alerts 756 Clinics identified in
1,000 locations 872 Medical Providers
37 States Impacted
New Billing Trends Unsupported DME
Acupuncture + electrical stimulation
Overbilling MRI Testing
644 MedAWARE Alerts
2014 NICB MedAWARE Alerts Published
NICB Commercial Fraud
• General Liability • Commercial Vehicle • Commercial Property • Cargo Theft
NICB Commercial Fraud • 46% Increase in Flood/Water Damage Questionable
Claims from 2011 - 2013 • 7% Increase in Questionable Slip and Falls from
2010 - 2014 • Cargo Theft Nationwide Increases
NICB Commercial Fraud Prosecutive Administrative Actions
1,576 1,443 1,569
1,856 2,115
0
500
1,000
1,500
2,000
2,500
2010 2011 2012 2013 2014
Vehicle Crime
• Vehicle theft on downward trajectory. – Theft methods more sophisticated. – Thieves rarely break into a car and hot wire it
anymore. – Use of deception or fraud is more prominent.
Vehicle Crime
• Counterfeiting of vehicle VINs is a common way to conceal stolen vehicles.
– Counterfeited vehicles formerly applied only to high end vehicles.
– Counterfeiting now occurs on most makes and models of vehicles.
Vehicle Crime
• Forged or altered Manufacturer Certificates of Origins (MCO) are used to register stolen vehicles with false identities. • Financial thefts are becoming more common where false identities or misleading information is used to finance a car, with no intention of paying off loan.
Vehicle Crime
• Thefts from auto dealerships are more common. Keys of vehicles at the dealership may be stolen from the dealership or swapped out during test drives. • Rental car theft is also on the rise and tied to exports.
Organized Vehicle Crime Prosecutive Administrative Actions
843 1,166 1,331
1,467
2,083
0
500
1000
1500
2000
2500
2010 2011 2012 2013 2014
Cybercrime • What we know
– Our lives revolve around wired and wireless networks
– According to the Center for Strategic and International Studies, “Cybercrime is a growth industry…
• Returns are great and risks are low;
• Conservative estimate - $375 billion in losses - while maximum could be as much as $575 billion.”
NICB 2014 Cybercrime Survey • The survey was designed to gather data to help NICB
determine if it should consider adding Cybercrime/ Cyber Fraud to its mission
• Audience was 400 Industry Executives
NICB Cybercrime Survey Highlights • 99% strongly agree/agree that sharing of information
related to Cybercrime would be a natural extension of NICB’s mission
• 96% strongly agree/agree receiving information regarding Cybercrime from NICB would be beneficial
• 84% would be willing to share Cybercrime-related information with NICB
NICB Cybercrime Survey Highlights • Greatest concerns and/or challenges in dealing
with Cybercrime – Hackers accessing sophisticated systems – Data breach/protecting customers – Ever-changing environment – Lack of knowledge/training – Fraudulent policies placed online
Cybercrime…Next Steps • Expand on our existing relationships to include cyber
information and investigations
• Utilize NICB’s infrastructure as an information- sharing portal to the P&C industry reference cyber-related activities and information collection
• Capitalize on NICB’s outreach through its members to over 100 million Americans
In Closing:
WE HAVE A SHARED RESPONSIBILITY TO WIN THIS CONFLICT
NICB, member companies, law enforcement, and anti-fraud organizations must present a united front to protect the American people and insurer investment.