Data sharing makes it easier to catch insurance fraudsters
Short term insurance fraud (STIF) is on the up, with nearly 10% of all claims being fraudulent to some degree, this despite the threat of perpetrators being jailed.
Garth de Klerk, CEO of the Insurance Crime Bureau (ICB), said: “As an industry we have adopted a zero-tolerance approach, and we will insist on investigation and prosecution.”
Debbie Sargent, owner of East London company Stephenson Insurance Brokers, said shortterm insurance companies in the past did not have intricate knowledge-sharing systems. Fraudsters were comfortable because their activities were isolated. This has changed and sharing STIF statistics is an increasingly common practice.
Sargent said a centralised approach to sharing information and intelligence makes it difficult for false claims to remain undetected, and “this was why acting as a [insurance] community was so important”.
Considering ICB’s extensive membership, the data pool on STIF is enormous, and any convicted fraudster’s details can be circulated, making a second false claim virtually impossible.
ICB members include Hawks, SARS, SAPS, FSB, Road Accident Fund and other government organisations, plus the major banks and insurance companies. The bureau employs several professional fraud investigators.
Although ICB does not collate statistics, De Klerk said: “We do see syndicates where the quantum’s are into the multiple millions and some reaching well into double digit millions. Often there is staff involved, and we have seen a number of convictions resulting in jail terms.”
Roger Williams has been in the insurance business for more than 50 years, running a brokerage in East London, associated with national insurance brands. He said with the advent of shared knowledge fraudulent claims are more easily detectable and not worth the risk.
“Any bending of the truth is fraud. There is an erroneous belief that insurance companies reduce all claims, so people feel they should escalate the numbers, increasing the real theft of four shirts stolen to eight.”
Williams cites car claims in which a previous scrape is linked to a current accident.
Michelle Wolmarans, who heads East London’s NFB Insurance, said: “If we come across a fraudulent claim, which in truth is not often in East London, we would show the person or the company the door, and never insure them again.”
According to the Global Economic Crime and Fraud Survey (2018) published by PricewaterhouseCoopers, SA ’ s rate of reported economic crime is 77%, compared with the global average of 49%.