In recognition of Fraud Prevention Month, Équité Association and its members are releasing a comprehensive thought-leadership series designed to illuminate the most pressing fraud issues currently facing the insurance industry. This series is not just about identifying the problems, such as the $900 million auto theft claims costs in 2025, but about showcasing the innovative solutions being deployed to disrupt criminal networks.

Craig Bran, VP Claims at Co-operators is revealing the impact of staged collisions and ghost brokers on honest Canadians and how a holistic approach across the organization is helping to identify fraud early in the claims process. Proudly Canadian since 1945, Co-operators is a leading financial services co-operative, offering multi-line insurance and investment products, services, and personalized advice to help Canadians build their financial strength and security.

Équité: For Fraud Prevention Month, what type of insurance fraud would you like to raise awareness about and why?

• Craig Bran (CB): Staged losses remain a significant issue in the insurance industry. These tend to be pre-mediated frauds, often involving other parties associated with the claims, such as other service providers. Staged losses can include:
  - staged vehicle thefts that can be linked to various schemes;
  - staged collisions, which could include false injury claims or inflating repair/towing costs; and
  - property claims where fire or water is used to intentionally cause damage.
  
  Various forms of policy misrepresentation, aimed at fraudulently manipulating policy premiums, have also increased and become increasingly complex and involved. An example is the increasing market infiltration by Ghost Brokers – people who, for a fee, unlawfully act as an intermediary between client and insurer who offer “expertise” in untruthful policy disclosures that have significant impact on premium. They are not licensed to act as insurance brokers. Those who access their services are a mix of co-conspirators, gambling they will not get caught when they need their policy for a claim, or victims who are exploited for their lack of insurance knowledge.  

Équité: How have fraud trends changed over time?

• CB: Technology has had a significant impact. Tools used by auto thieves are constantly evolving.  Artificial Intelligence (AI) offers opportunities to manipulate or fabricate documentation, at a time when insurers are developing customer experience that require high trust. It is more important than ever to accurately identify transactions that require more scrutiny so that the majority of our customers can continue to use client-centric tools for their transactions.  

Équité: What is your organization doing to protect your clients and the communities they live in from the impacts of insurance fraud?

• CB: Fraud has a significant impact on the insurance industry and our clients, and Co-operators has put operational and strategic resources in place dedicated to managing that impact on our business, our reputation and our ability to protect our clients and keep rates competitive. We take a holistic approach, combining Claims and Underwriting resources, to build and deploy the controls and capabilities we use to detect risk of fraud, to investigate cases where risk of fraud is identified, and to prevent fraud when it is conclusively identified. We focus on detecting the risk of fraud as early in the client or service provider transaction life cycle as possible, and with as much accuracy as possible, to minimize the impact of fraud management on the vast majority of client and vendor transactions that are conducted honestly.
  
  By pursuing regulatory complaints and collaborating closely with law enforcement and our insurance industry partners, we are removing some of the bad actors from the eco-system or at least causing a disruption to their fraudulent operations.
  
  We also work closely with our communications teams on initiatives aimed at increasing client awareness and education on the prevalent forms of fraud that they could be exposed to. Much of this happens during Fraud Prevention Month, which offers us the opportunity to focus on this important issue with clients as well as our employees to ensure they have the resources and knowledge they need to support our fraud prevention initiatives and support clients by detecting and reporting fraud. We all play a role in keeping our clients and communities safe from fraud.

Équité: How is technology advancement influencing how you approach fraud detection?

• CB: Automated fraud risk detection capabilities are a priority. We have built this capability internally and we also make strategic investments in external options when that makes sense. Our partnership with Équité and the ÉQ Insights platform that pools data to detect risk of fraud at a multi-insurer level is an important foundation of our fraud prevention strategy.

In an era of heightened risk, the insurance industry is more committed than ever to protecting clients from the impacts of fraud. Driving collaboration with government, law enforcement and other stakeholders, Équité and its members are strengthening fraud deterrence efforts to protect Canadians against insurance crime.

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