Is Insurance industry doing enough to curb fraudulent claims? as Zimbabwe Insurance Crimes Bureau comes into effect.
By Insurance24
HARARE, Fraudulent insurance claims are not peculiar to Zimbabwe alone, but has become a Global phenomenon. But is the Insurance Industry doing enough to curtail this?. In Zimbabwe alone, fraud claims constitute estimated 30 to 40 percent of claims paid annually.
These are the cases most insurers are facing and the litigation processes many times take forever. It is in that regard that the industry in conjunction with government is looking at setting up an independent Zimbabwe Insurance Crimes Bureau, which will have the capacity to detect, protect and prosecute the cases.
“We are hoping to launch the Bureau during the period of ZITF which is being held in Bulawayo. We are having meetings with responsible Ministry,” Insurance Council of Zimbabwe technical manager Nicholas Sayi said at the Zimselector/IPEC mentorship programme for journalists.
He said there industry should fight fraudulent claims risk through various means to avoid underperformance by the insurers.
Industry regulator, the Insurance and Pensions Commission estimates that a total $165 mln is paid out annually through fraudulent claims. Insurance fraud refers to cases in which individuals lie to an insurance company to get financial compensation for something they would not have received had the truth been told.
There are various forms of fraud which include fictitious car accident or death claims, exaggerated claims and backdating of insurance claims. A common false claim relates to individuals who only insure a car after it has already been involved in an accident and then go on to make an insurance claim after backdating the incident.
IPEC’s recent non life report for September 2017 showed that net claims amounted to $141.59 mln for the Q3 period which was 3% lower than the previous quarter. The claims ratio for the quarter was at 54%. How much of that could have been fraudulently claimed?
Emmaculate Musonza, a business development manager with Old Mutual at the workshop also indicated that prosecution of such cases that involves fraudulent claims often takes longer than anticipated periods resulting in losses.
She said added that the industry needs to cooperate on that front if the sector is to curb the scourge. The Bureue’s major aim is to prevent and fight insurance crimes and in most raising awareness.
