Combating Insurance Fraud in Workers’ Compensation: Insights from a Veteran Investigator

Insurance fraud continues to be a costly challenge across the industry, with the National Insurance Crime Bureau estimating that fraud may be involved in up to 10% of all insurance losses. For companies like Berkley Industrial Comp, which specialize in workers’ compensation insurance for high-hazard industries, detecting and preventing fraudulent claims is not just a priority—it’s essential to protecting our insureds and maintaining the integrity of the system.

The Power of Experience in Fraud Investigation

We recently explored this topic through our podcast platform, featuring Larry Henning, Senior Vice President of Anti-Fraud and Special Investigations at Allied Universal Services. With over 47 years of investigative experience, Larry’s career spans from law enforcement to insurance fraud detection, offering a unique perspective on how investigative techniques have evolved—from cassette tapes to AI-powered fraud detection tools.

Why Active Listening Still Matters

Despite technological advances, one of the most powerful tools in a fraud investigator’s arsenal remains active listening. Larry shared a compelling story where a simple but overlooked admission of arson was caught—not through tech—but through careful listening. As he puts it, “God gave you one mouth and two ears for a reason.” For claims professionals in workers’ compensation, this is a reminder that listening closely during interviews can reveal inconsistencies that scripted questions might miss.

Leveraging Technology to Enhance Investigations

The landscape of insurance fraud investigations has transformed dramatically. Today, our teams use cloud-based recording systems, virtual interviews, and real-time document sharing to streamline the process. These tools not only improve efficiency but also reduce travel costs and allow for faster resolution of claims.

The COVID-19 pandemic accelerated the shift to remote investigations, proving that many cases can be effectively handled without in-person interviews. This flexibility has become a permanent part of our investigative strategy.

Social Media and Geo-Intelligence: New Frontiers in Fraud Detection

Social media is now a critical resource in identifying fraudulent activity. Rather than manually combing through profiles, we utilize AI-driven social media analysis tools that scan hundreds of platforms using identifiers like email addresses. These tools help uncover posts or photos that contradict a claimant’s account.

Even more advanced are geo-intelligence tools, which allow investigators to search for social media activity within a specific geographic area and timeframe. These technologies have helped uncover witnesses to workplace accidents whose accounts differ from official reports—sometimes changing the entire trajectory of a claim.

Understanding State-Specific Reporting Requirements

Each state has its own rules regarding the reporting of suspected fraud. For example, Wisconsin requires evidence before mandatory reporting, while California mandates reporting when there’s a “material misrepresentation.” At Berkley Industrial Comp, our team stays up-to-date on state-specific fraud reporting laws to ensure compliance and protect our clients.

Why It Matters for Berkley Industrial Comp

As a leader in workers’ compensation insurance for high-hazard industries, Berkley Industrial Comp is committed to fraud prevention, claims integrity, and protecting our policyholders. By combining decades of investigative expertise with cutting-edge technology, we continue to raise the bar in insurance fraud detection and prevention.