More collaboration urged to combat insurance fraud

Tuesday, 28 February 2012 00:47 - - {{hitsCtrl.values.hits}}

Despite measures and policies put in place to combat insurance fraud, further collaboration between insurance practitioners, adjusters and motor workshops is needed to strengthen and improve fraud detection, say industry players.

The Sun Daily, citing PricewaterhouseCoopers executive director Angie Wong, reports that fraud comes in several forms and for the motor insurance industry, an area of common concern is claim leakage. “Both fraud and claim leakages have been a prevalent issue among the industry players for many years, and it takes just one person to initiate that intention to commit fraud.” Cooperation among all parties and awareness among the public is essential, she says.

Ms Wong also says that insurance companies have taken steps to address fraud as part and parcel of their normal claims procedures. The measures include regular reviews of their panel of workshops and adjusters.

SAS Malaysia head of software solutions, Helen Lim, says: “Most insurers have implemented sophisticated computer systems to identify fraud as soon as possible after it occurs and they factor these losses into their rates as a cost of doing business. Recovery of losses after the fact is slow, if it happens at all.”

She adds that the use of fraud analytics among insurers in the country is still minimal.

She estimates that 10% of all claims are fraudulent and less than 20% of fraudulent claims are detected or denied. “Today, it is estimated that more than 10% of all insurance claims are fraudulent, and insurers often accept fraud as the cost of doing business since it isn’t cost-effective to pursue fraudulent claims after settlement,” she says.