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Crime and Fraud
Friday, August 1, 2008
Consumer cost

With consumers and businesses coming under increased cash flow pressure from higher interest rates and inflation, insurance companies are noticing a marked increase in the number of fraudulent insurance claim submissions.

Adam Samie, CEO of Lion of Africa Insurance says that in the UK, since 1 in 10 claims are fraud it costs the industry and thus consumers £1.4 billion per annum adding an estimated £40 annually to the cost of individual insurance premiums. In South Africa, the ratio of fraudulent claims is higher costing the short term insurance industry alone close on R2 billion a year.
In the current economic climate any further increases in fraudulent claims will obviously make matters worse for the honest consumer.
Samie who chairs the SA Insurance Association (SAIA) has expressed an urgent need for industry experts and professionals to address this issue through the recently developed Insurance Crime Bureau (ICB), an independent industry body aimed at curbing and preventing insurance related crime in South Africa.
In this light the industry needs to come together, share information and co-operate actively to safeguard and protect the consumer.
Noor Osman, Lion of Africa representative to the board of directors of the SA Insurance Crime Bureau says his company has played a pivotal role in spearheading the establishment of the bureau. “Research we have reviewed has shown the successful implementation of fraud prevention units abroad in the UK and Switzerland, and we are confident our local efforts will show equally good results.”
According to Samie, fraudsters are not only violating the rights of the consumer but are corrupting the basic communal principle governing insurance practices, whereby the losses of the few are made good (indemnified) through the contributions of the many. Thus criminals who are caught by the ICB will be reported to the relevant law enforcement authorities and prosecuted.
 

Copyright © Insurance Times and Investments® Vol:21.7 1st August, 2008
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