JOHANNESBURG – Fraudulent insurance claims are on the increase and insurance companies and banks want to put a stop to it.
In 2014, 7,360 fraudulent insurance claims of over R400-million were blocked – a significant increase from 2,093 cases the previous year. And irregular claims for deaths tripled between 2013 and 2014.
“The banks are very robust in wanting to make sure that they are protecting their clients, that they know who they are doing business with. Not only are they compelled by law to do so but they also want to make sure that there is nobody stealing anybody else’s identity,” said Kalyani Pillay, the chief executive officer of the SA Banking Risk Information Centre.
Strict payout measures have been put in place by the insurance industry, according to Jacques Rossouw, managing director of the Astute Financial Services Exchange.
“Insurance companies want to pay out claims. If you speak to their CEOs, one of their top priority is to make sure that they can pay out the claim especially in the entry-level market. If you look at the funeral market… for them the first step is to make sure, is the person says who he says he is? And the family members that we can trace through the population register,” said Rossouw.
Home Affairs Minister Malusi Gigaba believes it’s in everyone’s interests to wipe out fraudulent claims.
“Fraudulent claims result in increased premiums being passed on to the policy holder… According to the Association for Savings and Investment SA, the total number of irregular death and funeral claims detected in 2014 was more than three times higher than in 2013,” said Gigaba.
The minister said more innovative ideas and strategies were needed to fight insurance and bank fraud.