The Chartered Institute of Loss Adjusters (CILA) established an Anti-Fraud Special Interest Group (SIG) in 2005 to enable members to share best practices and expertise in combating insurance fraud. The SIG works collaboratively with organizations like the ABI Anti-Fraud Committee and nearly 450 CILA members participate. While progress has been made in detecting organized fraud, more needs to be done to address opportunistic fraud and improve public perceptions of anti-fraud efforts. The CILA aims to protect honest consumers by ensuring claims are handled fairly and appropriately.

1. Interview with...
Bobby Gracey
Charlotte Parkinson, Modern Claims, spoke to the Chairman of the Chartered
Institute of Loss Adjusters’ (CILA) Anti-Fraud Special Interest Group (SIG)
about adopting a collaborative approach to fraud and protecting the rights of
the honest consumer.
Q
Why did the Chartered
Institute of Loss Adjusters
(CILA) decide to establish an
Anti-Fraud SIG?
A
The CILA created 11 Special
Interest Groups, including the
Anti-Fraud SIG, in 2005. The
purpose was to enable all members
to be associated with those who are
practising in, and have expertise in,
one of the specialist claims areas.
Today, nearly 450 CILA members are
part of the Anti-Fraud SIG where they
share best practice, seek advice in a
non-competitive environment, access
technical publications and speak to
leaders in the field. The Anti-Fraud
SIG liaises with various industry
groups, including the ABI Anti-Fraud
Committee on benchmarking fraud
performance, the Insurance Fraud
Bureau and working with the police.
In addition, the group responds to the
consultation process of, for example,
the SIA following the introduction of
the Security Industries Act. Internally,
the SIG regularly reviews the CILA exam
syllabus to ensure that the Institute’s
qualifications include the right technical
information on fraud, for example,
legal definitions, relevant case law. The
SIG’s involvement with other industry
qualifications has helped members with
these qualifications to embark on their
qualification journey with the CILA.
Q
Why did you want take the
position as Chairman of the
SIG?
‘Public perceptions about
combating fraud also need
to be addressed, as many
consumers do not believe
that any real progress has
been made’
A
Nearly four years ago, I was
asked to take over from Robin
Wintrip as Chairman of the
SIG. I was delighted and honoured
to do so and jumped at the chance! I
am passionate about fraud so to work
with a fantastic group of professionals
who are also very passionate is a
pleasure. The position of Chairman of
the Anti-Fraud SIG is a voluntary one
which is highly regarded and keeps
me in touch with adjusters and claims
professionals who deal with fraudulent
claims on a day-to-day basis.
Q
How does the SIG liaise with
organisations such as the
ABI’s Anti-Fraud Committee?
A
Working with other
organisations involved with
fraud can be challenging when
sharing best practice and data within
the confines of the data protection
act. The key is to look beyond this
and centre on what’s best for the
customer. Over the past few years,
we have worked on a number of
projects with the ABI’s Anti-Fraud
Committee, such as best practice,
and have developed a good working
relationship with them. In fact, one
of their members is joining our next
SIG meeting, which will be mutually
beneficial to both groups.
Q
How has fraud in the industry
changed since the SIG was
established, and over the
last few years, in light of regulatory/
market changes?
A
Over the past 10 years,
the insurance industry has
improved its general approach
to fraud and has tried to create an
anti-fraud culture from the top down.
There is more executive buy-in as
senior personnel start to acknowledge
the relationship between the cost
MC // Fraud Supplement 2015
11Interview with... Bobby Gracey

2. ‘The insurance industry
has made tremendous
progress but there is still
much to be done. We tend
to be good at what we
know, such as detecting
organised fraud, but we
need to get much better at
opportunistic fraud which
is far harder to detect’
of fraud and loss ratios. Additional
resources are now dedicated to
combatting fraud and the industry
is making better use of technology.
Fraud is now a sector within the
insurance industry instead of just an
add-on to claims. However, the journey
isn’t over. Although the industry has
made progress in preventative fraud
by learning new scams or ploys, or
reacting by understanding more
in regard to external motivators,
more needs to be done and support
given by the Insurance Fraud
Enforcement Department with regard
to opportunistic fraud, which still
remains the biggest problem for the
insurance industry. Public perceptions
about combating fraud also need to
be addressed, as many consumers do
not believe that any real progress has
been made.
Q
How does the organisation
aim to put the ‘honest
consumer’ at the heart of
what it does by routing out fraud?
A
The CILA’s ethos is to ensure
that members of the public
are treated fairly and that their
rights and status are protected. When
an adjuster undertakes investigative
work, often on behalf of insurers,
he comes to a fair conclusion about
whether a claim is covered by a policy,
the quantity of loss or damage, and
the amount that should be paid.
He is recognised as a professional
person of integrity with a high level
of knowledge and skills who is
subject to a code of conduct, which
embraces the principles of impartiality
and transparency. The need to act
fairly and justly is one of the key
requirements of the CILA charter and
a core principle of the profession. The
institute provides strict guidance to
its members on conflict of interest,
business ethics and confidentiality.
The CILA sets the standards of
the profession and protects those
standards. The Institute’s associate
qualification conferring chartered
status is the gold standard in the
industry and is respected worldwide.
From an insurer’s perspective, it is
important that claims handlers know
what ‘good’ looks like. An ‘honest
consumer’ will pass effective checks,
have no red flags against them and
present minimum risk, and these
consumers’ claims should be paid. A
small percentage of consumers will be
referred for further investigation such
as social media checks, face-to-face
statements, and surveillance.
Bobby Gracey
Bobby Gracey started working in
the insurance industry in the early
1990s and over the course of his
career, he has focused on working
with global customers to develop
and manage multi-national
investigative programs and cost
containment solutions.
For the past 15 years, Mr Gracey
has held a number of senior global
executive positions including
Global Vice President for Counter
Fraud Solutions at Crawford &
Company where he strategically
managed that part of their business
in 67 countries around the world,
CEO for an International forensic
business and Executive Vice
President for a leading US Claims
Investigation company.
Eighteen months ago, Mr
Gracey set up MolMax Solutions
Ltd, a company that provides
executive and strategic support
to organisations in the UK and
Ireland. He also assists various
International companies with their
business development efforts and
expansion plans.
Mr Gracey continues to remain
active in the counter fraud
community. To date he has
written three technical books on
counter fraud, which are used
as key reference materials by
operational fraud investigators,
the Association of British Insurers,
Chartered Insurance Institute and
Lloyds of London.
‘An ‘honest consumer’ will pass effective checks, have no
red flags against them and present minimum risk, and
these consumers’ claims should be paid’
MC // Fraud Supplement 2015
12 Interview with... Bobby Gracey

3. ‘It remains imperative to have a collaborative approach with all organisations and
invite member feedback on a regular basis in order to effectively fight against fraud’
Q
How well has the insurance
industry as a whole
responded to fraud?
A
As mentioned, the insurance
industry has made tremendous
progress but there is still much
to be done. We tend to be good at
what we know, such as detecting
organised fraud, but we need to get
much better at opportunistic fraud,
which is far harder to detect. Other
areas that need addressing include:
improving the measurement of
fraud by using definitions that are
common to all; better incentivisation
of adjusters to investigate fraud
more thoroughly which can be time
consuming and labour intensive; more
collaborative training between insurers
and adjusters; an industry wide
recognised professional qualification
in fraud.
Q
Does the CILA and other
organisations do enough
to support the industry/
members in the fight against fraud?
A
Over the past 10 years,
the CILA’s Anti-Fraud SIG
members have been sharing
best practice, seeking advice from
fraud experts, accessing technical
materials and attending and speaking
at fraud conferences. But more
support is needed: in a CILA survey,
our members stated that they would
like the industry to do more to share
topical news in fraud, trends and
examples of good practice. They felt
that it was often difficult to locate with
ease data, intelligence and guidance
on best practice when tackling fraud.
In addition, when information was
found, it was not focussed on the day-
to-day practicalities of adjusting or
investigating fraud. A big challenge for
the industry is to create one singular
best practice as different organisations
have varying opinions. But it remains
imperative to have a collaborative
approach with all organisations and
invite member feedback on a regular
basis in order to effectively fight
against fraud and this approach is at
the core of the Anti-Fraud SIG.
Q
Who is/should be responsible
for investigating and tackling
fraud and what is the Loss
Adjusters role here?
A
Everyone in an organisation
should be fraud aware and
those directly involved in the
claims process should understand
how to detect risk and refer, where
appropriate, to a specialist person or
team who can take the investigation to
a different level. However, not all staff
and, in particular, claims staff are given
sufficient specialist training to make
decisions on potentially fraudulent
claims. The loss adjuster’s role, as
mentioned previously, is to validate
genuine claims - is the claim covered
by the policy, what is the quantity of
loss or damage and how much should
be paid? When risk is detected, the
adjuster then refers the claim to a
specialist in-house fraud team or to an
insurer’s team.
Q
What is next for the CILA and
the Anti-Fraud SIG?
A
Preparations are underway for
the CILA’s annual conference
in September, which will
showcase how the Institute and
its members are responding to an
ever changing market place. Claims
professionals from all sectors of the
wider industry will attend this highly
informative event. The CILA’s Anti-
Fraud SIG will be represented at the
conference where members will share
topical news in fraud, trends and
examples of good practice. Away from
the conference the SIG will continue to
work with members in order to remain
relevant. And it will try and build even
stronger relationships with other
industry bodies in order to create a
single solution rather than individual
strategies to fraud.
The Chartered Institute
of Loss Adjusters (CILA)
The CILA is the UK’s leading
professional organisation for
independent claims specialists.
Its members operate under a
royal charter to investigate,
negotiate and agree the
conclusion of insurance and other
claims on behalf of insurers and
policyholders. CILA’s commitment
to setting standards, examinations
and professional conduct enables
it to support all members across
the industry. The institute ensures
that all members comply with
standards and actively encourages
more to achieve advanced levels
of technical and professional
competence.
‘[The CILA] will try and
build even stronger
relationships with other
industry bodies in order
to create a single solution
rather than individual
strategies to fraud’
MC // Fraud Supplement 2015
13Interview with... Bobby Gracey