Erick Soeth is leading expert in international life insurance fraud. In the first part of our interview, we asked Erick about what he is coming up against in the market today.

Tim: What are the latest trends in life insurance fraud? 

Erick: One of the most concerning things we now see is the use of synthetic identities.

Synthetic identities are often created using an amalgamation of information from legitimate identities - perhaps using real information that was compromised in a data leak. It could be as basic as addresses, e-mails and phone numbers, but could get more sophisticated with the aim of being convincing enough to defraud a financial institution. Once used, fraudsters will discard the false identity, and hope to cash in.

Tim: Is this type of fraud difficult to detect?

Erick: We can spot these types of scenarios with data research. It's relatively easy to check information like address histories. Then we can detect information that doesn't fit our expectations, such as a birth certificate that was registered the day before the death certificate is registered.

Often, it's also the absence of information. Maybe a "person" has no social media profiles or profiles that were made shortly in advance of taking out a policy. If you have a 45-year-old, they shouldn't just come out of nowhere at age 44! Their history should add up and we should be able to trace their roots to somewhere.

We are also tracking things like deep fakes. Fraudsters can lay down a lot of breadcrumbs with deep fakes. They can create somebody's entire social media profile or identity; photographs of them at the beach, with potentially made-up kids.

A big advantage that we investigators have is that we can put boots on the ground. We can get out of the digital world and talk with people who should know these individuals.

Tim: Your work extends beyond the US. What are you seeing at the global level?

Erick: I wouldn't say any particular place is most susceptible – although we do see areas with higher corruption levels are also at a higher risk for fraud. Also, things tend to come in waves. So, you won't see something from a particular area for quite some time, and then you'll see a rush of 5 or six different fake claims.

As a specialist in foreign claims, I see that the basics are getting better – like fake death certificates. At face value, these documents are often very close to what we'd expect from a particular country, and even the regions and jurisdictions within that country.

We are also tracking the risk of collusion. You might be getting documents that are legitimately issued by a registry department, but the fraud has happened further upstream. For example, there may be manipulated doctor statements or forged proof of a cremation or burial.

Tim: The industry has long been tracking organized groups – like nomadic fraud groups. What trend do we see in this area?

Erick: People are working together. And unfortunately, insurance fraud may not be the only thing that these criminal groups are interested in. Fraud can go hand-in-hand with human trafficking, money laundering and potentially drug trafficking. These groups are co-operating with one another on a more regular basis, and that includes sharing some of the techniques that are used.

Thankfully, our industry is also very good at exchanging knowledge. We exchange on who is seeing what, and what has worked in specific cases. Companies and organizations compare and contrast!

Tim: Are we seeing a trend to higher values? Would lower sums assured be more likely to go undetected?

Erick: In the past, we hadn't seen such larger-scale dollar amounts, but with some recent cases we've seen fraudsters stepping things up.

For lower values, it is important to see things beyond the American perspective. In the US, you might think that nobody is going to completely throw away their lives to go after a $20,000 claim. But that money can go exponentially further in another location. This is always something to keep an eye on.

Tim: What about living benefits, for example long-term care?

Erick: The long-term care space is an area of interest. With the trend to less in-person contact – things moving to video calls or phone calls and so on – fraudsters can try to manipulate benefit eligibility assessments.

It's probably not the typical hacker stealing people's information. You have people that are close to these elderly individuals and potentially manipulating them, manipulating documents, reaching out on their behalf and that type of thing.

Tim: Are fraudsters using behavioral levers as a kind of manipulation tool? Perhaps to coerce insurers to push through decisions quicker?

Erick: Yeah, absolutely.

With one of the synthetic ID frauds that we investigated, it had a combination of the claimant consistently harassing the insurer to pay the claim. This involved threats of hiring an attorney or pushing to speak directly with the responsible staff. But in one case even the attorney was a synthetic person, so you never know!

But we're aware of this type of manipulation. It can be a tell-tale sign something is wrong.