Another economic driver, he said, is that the insurance market is at the bottom of a rate slide, and antifraud activity can have a very favorable impact on profitability.

“If you can reduce claims costs, it will go directly to the bottom line,” he stated. With an effective antifraud program, companies can expect to detect questionable activity in one out of 10 property-casualty claims, according to Mr. West's figures.

However, the sad statistic he cited is that “most companies these days are lucky if they capture one in a hundred.”

The most recent type of fraud that firms are encountering, said Mr. West, is the creation of ghost vehicles for fake accidents using stolen identification.

He explained that criminals will get vehicle identification numbers from junkyards for cars titled in other states. Using a fake ID, they will purchase insurance with a stolen check, and within 30 to 60 days put through a claim for theft and destruction of the vehicle at a dollar level low enough to avoid much scrutiny.

As a minimal claim, it will typically receive little investigation and be processed fairly rapidly, and the fraudster will take off with the claims payment shortly before the policy cancels, “because the credit card used to pay for it turns out to be stolen, or the check is a bad check,” he noted.

The method for combating this, Mr. West advised, is to recognize identity theft as early as possible using the “pre-fill” data system, which matches personal ID details against information in a data bank such as “ChoicePoint,” which is “prepopulated” with information about that individual.

If the data doesn't match up with the information given to the insurance agent, “that's a red flag,” and the individual should be ready to explain, he said.

However, as the insurance community has ramped up its fight against such identity-based fraud, Mr. West said criminals have sped up the pace of their activity. “A year ago this kind of phony claim would come in from 30 to 60 days after the policy was issued. Now it's seven to 14 days.”

The problem insurers have, he noted, is that there are legitimate claims that can arrive shortly after policies are taken out.

To combat fraud rings, insurers can check claims using link analysis systems that look for relationships and repetition, Mr. West said. Systems look for the same phone or vehicle identification numbers, names of doctors, lawyers or body shops.

Asked about newly emerging technology, Mr. West mentioned vocal stress analysis, which looks at vocal tremors in voice patterns that indicate someone is not telling the truth.

“So, if you're recording a claim statement and lights flash indicating a high amount of vocal tremor,” an adjuster should apply extra scrutiny, he explained, adding that use of the technique is not widespread yet, “but it does have potential.”

Another technical tool that can verify claims data is the event data recorder placed in most newer cars, he said. The recorder logs three-to-five seconds of data before an airbag deploys in an accident.

The auto event recorder, which is similar to the “black box” in airplanes, can reveal a car's speed, whether it was accelerating or decelerating, and whether it was sliding, said Mr. West.

A product called “Vorad,” designed for large trucks and big recreation vehicles, will record images of other vehicles in close proximity and 30 seconds of data. Mr. West said it can show, for example, the path of a vehicle that runs alongside a truck and cuts it off.

This kind of technology can help provide evidence of “swoop and squat” techniques that fraud rings use to create crashes, he noted, helping to establish the true circumstances of an accident.

Mr. West added that systems can be put in place to profile doctors, repair shops and claims handled by various adjusters to set baselines, so a claims operation can take action when a doctor or a body shop shows up as deviating from the norm.

Whatever technology insurers use in their antifraud fight, it must be constantly updated, modified and configured to deal with the latest scams, he said, because as soon as investigators become familiar with an insurance criminal's technique, the criminal will change their method to do a different kind of fraud.

In addition to the growing use of false identity, he pointed out that “fraudsters are learning how to use computers more effectively in commission of fraud.”

He noted that since insurance can now be applied for and processed online, criminals are growing skilled at going into cyberspace and “making claims look like normal claims and making themselves look like normal insureds.”