Insurer fires warning shot at fraudsters
07 August 2009
Insurance fraud in Western Australia has escalated in the past year as the economic impact of the global financial crisis hits home, the State’s leading insurer has said.
RAC Insurance figures show that in the last financial year fraud investigation referrals increased by 30 per cent.
Fraud costs the insurance industry in Australia an estimated $2.1bn a year and adds between $70 to $100 on every insurance policy across the country.
RAC Manager of Technical Claims Glen Walker said the upturn in fraud cases was a tell-tale sign of the difficult circumstances being experienced by people in the current economic climate.
“This is the highest level of fraud referrals we’ve experienced. It’s a concerning trend that people seem to think insurance fraud is an option for quick cash when times are tough,” Mr Walker said.
“When people lose their jobs or fall on tough times they often see making a fraudulent insurance claim as a quick fix to a financial problem.”
But Mr Walker warned people against committing fraud saying that insurers are now better than ever at spotting fraudulent cases.
Speaking at the Economic Environment Impact on Fraud Conference in Perth he said that capabilities for detecting insurance fraud had increased and there was greater sophistication of methods used for detection.
“We have a dedicated team of anti-fraud specialists at the RAC who are trained specifically to investigate dubious or fraudulent claims and people will get caught,” Mr Walker said.
“This includes the use of advanced analytics in the identification of trends and patterns in fraudulent claims. This has been particularly beneficial in combating organised crime syndicate fraud such as staged accidents.
“There is also greater industry collaboration through the Insurance Council of Australia making it more difficult for serial offenders to defraud multiple insurance organisations.”
Mr Walker said it was difficult to quantify the cost of insurance fraud to the RAC because many people withdrew their claim once they knew it was being investigated.
“We have seen the value of identified fraudulent claims double over the past three years to almost $4m,” Mr Walker said.
“Our message to potential perpetrators is don’t do it because the impact personally and professionally is just not worth it.
“Offenders have been prosecuted and convicted. Many will find it impossible to get insurance cover in the short term – and being uninsured is an exposure that most people cannot afford.”
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