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CANATICS Aims to Curb Car Insurance Fraud

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Detecting car insurance fraud in Ontario will get a much needed boost in 2015 as a new not-for-profit group joins in to help reduce the escalating threat.

Canadian National Insurance Crime Services, or CANATICS for short, has teamed up with BAE Systems to develop analytical tools to identify potentially fraudulent claims in insurance industry pooled data. Ten insurance companies in Ontario including Wawanesa, which recently joined the programme, will provide the data linked to suspicious claims and investigative tools will be developed to expose hidden patterns of fraudulent behavior.

It's estimated that as much as $1.6 billion per year is paid by insurance companies in response to fraudulent or inflated claims in Ontario, which is a primary reason that drivers in the province pay the highest insurance rates in the country.

NetReveal is the software package being employed by BAE to help monitor behaviour by integrating data from multiple systems and insurance companies to create a single view for fraud detection and investigation. BAE notes that six of the top 10 financial banking and insurance institutions worldwide currently use the security-based solution.

Generally, auto insurance fraud falls into two categories. Opportunistic fraud is the padding of originally legitimate claims and premeditated fraud includes activities such as staged collisions or billing for services not provided.

In February 2013, State Farm Canada launched one of the largest lawsuits for insurance fraud in Ontario, seeking damages of $11 million from a Toronto health centre and five people who worked there. State Farm said false invoices or treatment plans for medical or rehabilitation needs were submitted by health centre employees and that it had paid out $1.4 million for services or devices that were not recommended or provided by the health professional who allegedly signed the documentation.

The Ontario Liberals have recognized the impact of such actions and seek to implement measures to fight car insurance fraud with the introduction of Bill 171. In addition to speeding up settlements and resolutions to accident claims, clarity in billing practices from auto body shops, tow truck operators and storage providers is addressed as well as more oversight of health clinics that offer rehabilitation services.