Insurance fraud costs all of us, most particularly the honest consumer. Insurers have no option but to pass the increased cost of claims on to the consumer by means of increased premiums.
An association called the Insurance Fraudline aims to combat the high occurrence of insurance fraud in South Africa.
The short-term insurance industry, represented by the South African Insurance Institute (SAIA), the long-term insurance industry, represented by the Life Offices' Association (LOA) and intermediaries through the South African Financial Services Intermediaries Association (SAFSIA) are collaborating in establishing the Insurance Fraudline.
In recent years, the insurance industries have realised that the impact of insurance fraud was serious. To address fraudulent behaviour, the Insurance Fraudline was launched. It is particularly aimed at fraud committed by consumers, service providers and the employees of insurance companies.
Any member of the public who wishes to report an alleged incident of fraud or what is perceived as inappropriate behaviour can contact the Insurance Fraudline free of charge and anonymously. This information will be received, analysed and passed on to the relevant industry bodies for investigation and action by their members.
Traditionally, the local short-term insurance industry has dealt with fraud simply by rating the risk to cover the increased cost of claims, says Barry Scott, chief executive officer of SAIA. "However, in recent years the short-term insurance industry has realised that fraud was partly responsible for pushing premiums beyond affordable levels and driving clients away. Industry sources rate the incidence of short-term insurance fraud in South Africa around 15% of premiums, costing the industry about R3 billion per year."
Regarding long-term insurance, fraud is also a significant factor, says Gerhard Joubert, chief executive director of the LOA. "LOA-member companies have implemented extensive measures, including a claims register to combat fraud. Despite having taken these steps, fraudulent claims detected and solved last year, amounted to an estimated value of more than R100 million."
Insurance Fraudline contributes significantly towards reducing the incidence of particularly white-collar crime, while simultaneously contributing to improving systems of governance and risk management.
Tip-Offs Anonymous, which manages Insurance Fraudline, is a partnership between Deloitte & Touche and Brian Adams & Associates (Pty) Ltd, a professional security risk management and consulting company in South Africa.
This company is equipped with state of the art technology and is operated by a team of skilled and experienced professional agents. The function of Tip-Offs Anonymous is to receive and analyse information received and then to report their findings to either SAIA, the LOA or SAFSIA.
Members of the public who wish to report any alleged insurance fraud or inappropriate behaviour can contact the Insurance Fraudline on:
Free Post DN298
Umhlanga Rocks, 4380