1. What is CANATICS?
CANATICS is a not-for-profit organization created by the insurance industry in Canada to help fight organized auto insurance fraud. It uses state-of-the-art data analytics tools to identify suspicious claims and facilitate further investigations by individual insurance companies. Insurers who participate, by allowing their data to be pooled and analysed, must be members, and adhere to strict privacy controls. BACK
2. What is “data analytics”?
Data analytics is the discovery and communication of meaningful patterns in data, usually through the use of computer software that inspects large volumes of data much faster than people ever could. Data analytics is used by many different organizations and industries around the world for a wide array of purposes. In the case of CANATICS, for example, the tool might discover that the same car was insured with three different insurers over several years, and was involved in three different suspicious claims. This is the sort of connection that individual insurers can’t always make, but could indicate a large-scale organized crime ring at work. BACK
3. What is “data pooling” or “pooled data”?
Data is pooled by CANATICS to perform data analytics for the purpose of issuing fraud alerts. Participating insurers do not have access to data inside the CANATICS tool. BACK
4. Has this sort of thing ever been done before?
Data analytics, and the use of pooled data, has long been used in the banking and insurance industries to support the identification of fraud. The National Insurance Crime Bureau in the U.S. has been using data analytics to detect fraud since 1992, and the Insurance Fraud Bureau in the UK has been doing it since 2006. BACK
5. Are all insurance companies members of CANATICS?
Currently, there are 9 insurance companies (some with multiple brands) who are members of CANATICS. These companies represent about 75% of the auto insurance business in Ontario. Membership is open to all insurers. BACK
6. What is meant by “organized” fraud? Are there different types of auto insurance fraud?
Yes, there are three basic types of insurance fraud. The following definitions are from the Ontario government’s Anti-Fraud Task Force report:
Organized Fraud: several participants with different roles within Ontario’s auto insurance system create an organized scheme designed to generate cash flow through a pattern of fraudulent activity;
Premeditated Fraud: a participant within Ontario’s auto insurance system, alone or with others consistently charges insurers for goods or services not provided, or provides and charges for goods and services that are not necessary; the participant is involved in a pattern of fraudulent activity, possibly at the expense of motor vehicle collision victims or possibly with their complicity; and
Opportunistic Fraud: an individual pads the value of his or her auto insurance claims by claiming for benefits or other goods and services that are unnecessary or unrelated to the collision that caused the claim. BACK
7. What type of fraud is CANATICS focused on?
CANATICS was created to fight organized and premeditated fraud. This is where crime rings involving numerous people (e.g., recruiters, tow truck operators, shady medical facilities etc.) stage collisions and fraudulently bill insurance companies for services that were not performed or not needed. These crime rings are sophisticated and organized, and target multiple insurers over many years.
CANATICS is not involved with opportunistic fraud, in which a person has an actual accident, and then uses it as an opportunity to pad their claim and get more money than they were entitled to. These types of fraudulent claims are identified and investigated by individual insurers. BACK
8. Who benefits from CANATICS?
We all do. Fraud is a large and growing problem in the auto industry system and Ontario’s 9 million drivers are experiencing rising premiums and decreased road safety.
KPMG estimated that insurance fraud costs Ontario drivers up to $1.6 billion per year. If these costs can be controlled, Ontario drivers will ultimately benefit. BACK
frequently asked questions
9. What led to the creation of CANATICS?
Several things. The growing cost of auto insurance in Ontario had been an issue with consumers for several years, sparking the government to look closely at what was causing the problem. There was a KPMG report that found auto insurance fraud costs as much as $1.6 billion a year. Also, a report from the Anti-Fraud Task Force contained numerous recommendations, including that “…insurers should move aggressively to establish an organization that would pool and analyze claims data in order to identify potential cases of organized and premeditated fraud…”
In response to the Task Force’s recommendation, and the government’s ongoing mandate to reduce auto insurance rates, the industry moved forward with the implementation of CANATICS. BACK
10. How does CANATICS ensure that my information is kept private?
The privacy of the data provided by our member insurance companies is foundational to our operations. Our principles of privacy and security are outlined in this video (link).
11. Where is CANATICS data stored? What security measures are in place?
The data is stored in a secure data centre in Canada. CANATICS has engaged a market leader in cyber security to deliver this solution and has implemented leading industry controls to protect data during its entire lifecycle. BACK
12. What privacy controls are in place?
Privacy protection is a very high priority for CANATICS and its members and is supported and endorsed by the Board of Directors and the Privacy Risk Management Committee. Only the data required to perform meaningful analysis is collected and used by the tool. Member insurance companies have no direct access to the data. All access is through alerts and reports that use data masking to limit the sharing of information between insurers to that which is supported by the consents obtained. Watch this video (link) for more information on CANATICS commitment to privacy and security of data. BACK
13. Is my data in the system now?
If you have an Ontario automobile policy and/or claim with one of the members of CANATICS, some of your data may be in the system. BACK
14. Is CANATICS only in Ontario?
For now, yes. Over time, CANATICS may expand into other provinces. BACK
15. What type of data is in the system?
Generally, the type of data in the system is policy and claims data. However, certain sensitive data, for example banking information, is not included. BACK
16. Who sees the CANATICS data?
For the most part, no one. The data is pooled, not shared. The data analytics is done by the tool itself. Alerts are created when unusual behaviour is identified. CANATICS sends the claim alert to the insurer who submitted the claim. The alert uses data masking to limit the sharing of information between insurers to that which is supported by the consents obtained. BACK
17. What qualifies as “unusual or suspicious behaviour/activity”?
As an example, the tool might discover that the same car was insured with three different insurers over several years, and was involved in three different suspicious claims. This is the sort of connection that individual insurers can’t always make, but could indicate a large-scale organized crime ring at work.
We can’t share much more than this about what constitutes fraud indicators or suspicious activity, or the fraudsters will use this information to try to evade detection. The crime rings that CANATICS is trying to help stop are sophisticated and adaptable. BACK
18. What is done so that innocent people aren’t accidentally accused of being fraudsters?
The CANATICS tool has a high threshold for what it will identify as unusual or suspicious claims activity. Only a very small percentage of claims result in an alert being sent to a member insurance company.
A CANATICS alert is not proof. It is a notification to an insurer that there may be something unusual going on. At that point, CANATICS’ work is done. It is up to the insurer to decide whether to look into the claim.
An investigation into a claim must be conducted by the insurer before it can be deemed fraudulent. BACK
19. Is it legal for CANATICS to have my data?
Yes. Compliance with laws is foundational to our operations. We have worked proactively to design our fraud detection tool to meet legal requirements. One of the ways in which we can demonstrate that it is legal for CANATICS to pool data is consent. There is specific, clear consent language in the standard policy and claims forms approved by the government regulator (Financial Services Commission of Ontario) that allows disclosure to fraud prevention organizations, and allows for the pooling and analysis of the data for the “purpose of preventing, detecting or supressing fraud”. BACK
20. Who pays for CANATICS?
Member insurance companies. BACK
21. Does CANATICS conduct investigations?
No. After an alert is issued, CANATICS’ job is done. It is up to the member insurers to conduct investigations and take appropriate action. BACK
22. What do I do if I suspect fraud?
Call fraud line – 1 877 IBC TIPS. BACK