THOSE who believe they have fallen prey to false or exaggerated insurance claims can from today call a hotline set up by an insurance body which wants to help fight fraud.
The General Insurance Association of Singapore (GIA) said in a statement yesterday that the hotline - 1800-44-37283 or GI-FRAUD - is part of a campaign to "educate the public on this supposedly 'victimless' crime and its repercussions".
It especially wants to know about motor-insurance fraud from possible victims, who can call the hotline on weekdays, between 9am and 5pm.
They will be asked to give details about the purported fraud, such as staged accidents or being offered money to file inflated claims, GIA executive director Derek Teo told The Straits Times.
Cases that are found to be legitimate might even be referred to the authorities. But the main aim of the hotline is to allow GIA to track fraudulent claims, and see if existing laws need beefing up, explained Mr Teo.
GIA, which was set up in 1965 and now represents 38 insurers such as NTUC Income, AIA Singapore and AXA Insurance, said insurers are also setting up their own special investigative units to detect and fend off fraud.
While Singapore's domestic insurance industry grew 5.4 per cent last year to $3.34 billion in total gross premiums, it suffered $140 million in losses from inflated and fraudulent motor-insurance claims during the same period. These losses undermine insurers' ability to offer lower premiums and be profitable.
Mr Teo said the price of insurance fraud "is a cost to everyone because industry losses from fraud must be recouped", adding that "we all pay the price".
NTUC Income, which insures about 250,000 vehicles, making it the leading motor insurer here, welcomed GIA's move as it "increases the industry's ability to work with the public to fight fraud".
Mr Peh Chee Keong, NTUC Income's vice-president (motor insurance), also pointed out that his firm already has its own anti-fraud schemes.
For instance, the insurer sends staff down to accident scenes to help customers and has also set up its own motor-fraud investigation unit. Over the last three years, NTUC Income has referred more than 100 cases to police, said Mr Peh.
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Insurance Fraud in Spotlight as GIA Anti-Fraud Hotline is Launched
Thankfully, the vast majority of car insurance customers are honest, and if they ever have to make a claim on their policy they are accurate and complete. But there is the occasional individual who will present a more questionable picture of events to their insurer, which can lead to losses which are, it is often claimed, passed on to honest motorists. To put this in numbers, last year the $3.34billion Singapore domestic insurance industry suffered $140m in losses due to inflated or fraudulent claims.
As a new GIA anti-fraud hotline is launched in Singapore, we look at one recent claim that saw a high court judge call for more anti-fraud measures.
High Court Judge Halts Settlement and Orders Investigation
A recent case involved an accident that occurred in 2010. A certain defendant called Lee Jee hit the back of a Mr Tan Poh Weng Andy’s company van, which itself struck the vehicle in front.
Despite Lee accepting 95% liability, Justice Choo did not approve the settlement due to certain developments that suggested an investigation was in order.
Mr Tan had six accidents in seven years: Justice Choo said “a fuller inquiry might be necessary”
Thankfully, the vast majority of car insurance customers are honest, and if they ever have to make a claim on their policy they are accurate and complete. But there is the occasional individual who will present a more questionable picture of events to their insurer, which can lead to losses which are, it is often claimed, passed on to honest motorists. To put this in numbers, last year the $3.34billion Singapore domestic insurance industry suffered $140m in losses due to inflated or fraudulent claims.
As a new GIA anti-fraud hotline is launched in Singapore, we look at one recent claim that saw a high court judge call for more anti-fraud measures.
High Court Judge Halts Settlement and Orders Investigation
A recent case involved an accident that occurred in 2010. A certain defendant called Lee Jee hit the back of a Mr Tan Poh Weng Andy’s company van, which itself struck the vehicle in front.
Despite Lee accepting 95% liability, Justice Choo did not approve the settlement due to certain developments that suggested an investigation was in order.
Mr Tan had six accidents in seven years: Justice Choo said “a fuller inquiry might be necessary”
No Claim Bonus? In April this year Mr Lee discovered that Tan had a total of six accidents from 2006 to 2012; an annual event except for in 2009. In addition, the fact that Tan was unemployed and was an un-discharged bankrupt persuaded the High Court judge to open an investigation.
Mr Tan had also changed his name in 2011 (from Tan Poh Kim), the reason for which was unclear.
Justice Choo wrote: “It may indeed be truly coincidental for the plaintiff to have such bad luck, but the circumstances indicate that a fuller inquiry might be necessary. Thus, I do not think that the court should endorse the settlement until then.”
That fact that Lee might have no means of investigating these concerns contributed to Justice Choo’s decision not to rubber stamp the settlement.
There was also some concern over whether Tan’s pre-existing spinal condition “might be exaggerated or his injuries unrelated to the accident in question,” according to Justice Choo.
In Singapore law, parties struck from the rear are nearly always held blameless.
A new GIA hotline aims to educate the public on insurance fraud and assist those who think they may have been victims of it.
Does New GIA Anti-Fraud Hotline Offer More Protection?
Since this story hit the news, a new anti-fraud hotline has been set up by the General Insurance Association of Singapore (GIA), aimed at educating the public “on this supposedly ‘victimless’ crime and its repercussions”. The hotline can be reached on 1800-44-37283 or GI-FRAUD, Monday to Friday from 9am to 5pm. The GIA is particularly keen for those who think they may have been victims of car insurance fraud to contact them.
While the introduction of the GIA hotline may well be coincidental, it follows Justice Choo’s assertion in November, at the Tan Poh Weng Andy case, that insurers need more protection against fraudulent activity; Justice Choo referred the matter to the Attorney-General.
What Else Can Be Done to Fight Fraud?
But what form could other measures take? In the UK in 2011, a special police unit was formed to deal with fraudulent insurance claims which in that year added an average of £44 (S$90) to every UK motorist’s premium. The 35-person London unit was funded by insurance firms to the tune of £9m (S$18.47m).
Would a similar unit be workable in Singapore? However it might be funded, benefits would likely be seen by every honest driver – most notably in the form of lower premiums. But it might also deter fraudulent claims in the first place, making the claims process quicker and less stressful for everyone.
21st Century Fraud Prevention from DirectAsia.com
Here at DirectAsia.com we have considerable experience in identifying potentially fraudulent claims, thanks to modern processes and a management team with unrivalled experience in the insurance industry – not only in Asia, but in Europe and North America too. Fraud prevention measures help DirectAsia.com further bring down premiums.
TodayOnline.com report: http://www.todayonline.com/singapore/motor-insurers-need-more-protection-against-fraud-says-high-court
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New hotline for reporting insurance fraud
From Dec 20, members of the public who wish to report suspected cases of insurance fraud can call a new hotline by the General Insurance Association of Singapore (GIA).
The hotline, GI-FRAUD (1800 443 7283), can be used to alert the association to possible cases of insurance fraud, particularly in the motor insurance sector, where fraud cases are prevalent. Last year, the general insurance industry suffered S$140 million in losses from inflated and fraudulent motor insurance claims.
The GIA Anti-Fraud Committee is campaigning to educate the public on motor insurance fraud and its repercussions. It is also tracking fraudulent claims with the use of data analytics and advocating legislative changes to address the problem.
General insurance firms have set up their own investigative units dedicated to detecting and fending off fraud.
"We have to bear in mind that the cost of insurance fraud to insurers is a cost to everyone because industry losses from fraud must be recouped," said GIA Executive Director Derek Teo. "Insurance fraud... is everybody's concern because we all pay the price."
The GIA encourages the public to call the hotline if they have information on possible fraudulent claims filed with motor insurers, have been offered money by touts to submit inflated or fraudulent claims to motor insurers, or if they have evidence that they were the victim of a staged motor accident.
The hotline is open every weekday, from 9am to 5pm.
read more
Motor insurers need more protection against fraud, says High Court
Calling for more safeguards against motor insurance fraud, a High Court judge ordered an investigation into an accident, even though both parties involved had agreed on how the liability would be settled, saying there were “serious questions to be answered”.
Issuing his grounds for referring the matter to the Attorney-General yesterday, Justice Choo Han Teck said motor insurers may have to do more to guard against exaggerated claims or those without merit and that it would be “sensible” for them to have a common database to track and trace repeat claims.
As the law generally holds the party whose vehicle was hit from the rear blameless, or nearly so, claims without merit are difficult for lawyers to detect and for the courts to spot, he said.
The motor accident in question occurred on May 26, 2010, when the defendant Lee Jee’s bus collided into the rear of Mr Tan Poh Weng Andy’s company van, which in turn slammed into the car in front.
Mr Tan had claimed 100 per cent liability against Lee, but later accepted the offer of 95 per cent liability. Damages were to be assessed.
But Justice Choo declined to approve the settlement, citing several developments that he said warranted an investigation.
At around April this year, Lee discovered that Mr Tan had been in six accidents between 2006 and last year, with one every year except 2009. He had previously been aware of only three accidents involving Mr Tan, 42, an undischarged bankrupt who is currently unemployed.
“It may indeed be truly coincidental for the plaintiff to have such bad luck, but the circumstances indicate that a fuller inquiry might be necessary. Thus, I do not think that the court should endorse the settlement until then,” Justice Choo wrote.
“The defendant may not be blamed for wishing to settle because it might not be financially sensible to litigate. However, there are serious questions to be answered, which perhaps the defendant has no means of investigating.”
It was also not known why Mr Tan had changed his name in 2011 — he was previously known as Tan Poh Kim — and how many times he might have done so.
Considering his history and a medical report of his injury, which included spondylolisthesis, a spinal condition, the judge said his claim “might be exaggerated or his injuries unrelated to the accident in question”.
“Without making any assumptions but, for completeness”, Justice Choo added that it may also be relevant to look into the details and circumstances of all defendants involved in various accidents with Mr Tan.
When contacted yesterday, Mr Tan’s lawyers from Clifford Law said: “We are surprised at the judge’s decision. We are studying the decision and grounds of decision carefully and we believe our client’s case is genuine.”
A spokesman from the Attorney-General’s Chambers said yesterday it had not received any referral from the court on this matter.
“Once any referral is received, we will study it carefully,” she said.
Mr Lee’s lawyers could not be reached by press time.
read more
From Dec 20, members of the public who wish to report suspected cases of insurance fraud can call a new hotline by the General Insurance Association of Singapore (GIA).
The hotline, GI-FRAUD (1800 443 7283), can be used to alert the association to possible cases of insurance fraud, particularly in the motor insurance sector, where fraud cases are prevalent. Last year, the general insurance industry suffered S$140 million in losses from inflated and fraudulent motor insurance claims.
The GIA Anti-Fraud Committee is campaigning to educate the public on motor insurance fraud and its repercussions. It is also tracking fraudulent claims with the use of data analytics and advocating legislative changes to address the problem.
General insurance firms have set up their own investigative units dedicated to detecting and fending off fraud.
"We have to bear in mind that the cost of insurance fraud to insurers is a cost to everyone because industry losses from fraud must be recouped," said GIA Executive Director Derek Teo. "Insurance fraud... is everybody's concern because we all pay the price."
The GIA encourages the public to call the hotline if they have information on possible fraudulent claims filed with motor insurers, have been offered money by touts to submit inflated or fraudulent claims to motor insurers, or if they have evidence that they were the victim of a staged motor accident.
The hotline is open every weekday, from 9am to 5pm.
read more
Motor insurers need more protection against fraud, says High Court
Calling for more safeguards against motor insurance fraud, a High Court judge ordered an investigation into an accident, even though both parties involved had agreed on how the liability would be settled, saying there were “serious questions to be answered”.
Issuing his grounds for referring the matter to the Attorney-General yesterday, Justice Choo Han Teck said motor insurers may have to do more to guard against exaggerated claims or those without merit and that it would be “sensible” for them to have a common database to track and trace repeat claims.
As the law generally holds the party whose vehicle was hit from the rear blameless, or nearly so, claims without merit are difficult for lawyers to detect and for the courts to spot, he said.
The motor accident in question occurred on May 26, 2010, when the defendant Lee Jee’s bus collided into the rear of Mr Tan Poh Weng Andy’s company van, which in turn slammed into the car in front.
Mr Tan had claimed 100 per cent liability against Lee, but later accepted the offer of 95 per cent liability. Damages were to be assessed.
But Justice Choo declined to approve the settlement, citing several developments that he said warranted an investigation.
At around April this year, Lee discovered that Mr Tan had been in six accidents between 2006 and last year, with one every year except 2009. He had previously been aware of only three accidents involving Mr Tan, 42, an undischarged bankrupt who is currently unemployed.
“It may indeed be truly coincidental for the plaintiff to have such bad luck, but the circumstances indicate that a fuller inquiry might be necessary. Thus, I do not think that the court should endorse the settlement until then,” Justice Choo wrote.
“The defendant may not be blamed for wishing to settle because it might not be financially sensible to litigate. However, there are serious questions to be answered, which perhaps the defendant has no means of investigating.”
It was also not known why Mr Tan had changed his name in 2011 — he was previously known as Tan Poh Kim — and how many times he might have done so.
Considering his history and a medical report of his injury, which included spondylolisthesis, a spinal condition, the judge said his claim “might be exaggerated or his injuries unrelated to the accident in question”.
“Without making any assumptions but, for completeness”, Justice Choo added that it may also be relevant to look into the details and circumstances of all defendants involved in various accidents with Mr Tan.
When contacted yesterday, Mr Tan’s lawyers from Clifford Law said: “We are surprised at the judge’s decision. We are studying the decision and grounds of decision carefully and we believe our client’s case is genuine.”
A spokesman from the Attorney-General’s Chambers said yesterday it had not received any referral from the court on this matter.
“Once any referral is received, we will study it carefully,” she said.
Mr Lee’s lawyers could not be reached by press time.
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High levels of fraudulent car insurance claims proving challenge for insurers
The motor insurance industry has seen steady losses over the last few years and this is an area that general insurers face challenges in, said industry players interviewed by Singapore Business Review.
From an insurer’s perspective, ACE Insurance country president Mack Eng shared that one of the most challenging product lines is individual motor as claims ratios for this product is high due to various factors. “It is one of the products that continuously going through adjustments in pricing to ensure their continued viability for insurers,” he said.
AXA principal officer and chief executive officer (CEO) of AXA Insurance meanwhile warned that motor insurers “will have to be more cautious with the increasing number of cars, as third-party injury claims as well as fraudulent claims have been exponentially increasing in Asia, including Singapore.”
“Major motor players will have to focus on claims management and productivity to ensure profitability for this line of business,” he added.
AVIVA CEO Simon Newman echoed the same noting that “car insurers will have to focus on cost management to beat the trend of underwriting losses while ensuring premiums remain affordable.”
To address the challenge on cost management, AVIVA claims to be the first insurer in Singapore to offer car insurance solely online, direct to the customer. “With our online model, not only does it offer unprecedented convenience, it is a low-cost model that allows us to pass on cost savings to our customers,” said Mr. Newman.
In terms of claims management, AVIVA’s chief noted that car insurers will also have to review their processes to avoid fraudulent and inflated claims. “One way we are doing so at AVIVA is to encourage our customers to use our approved repairers by having a wide network of workshops so that it is convenient for our customers. We also guarantee approved repairs for 12 months,” Mr. Newman said.
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Anomaly where insurer, guilty parties can refuse to pay for car repairs
MY WIFE had the unfortunate experience of having her stationary car rear-ended by a commercial vehicle. The driver held a valid Singapore licence and was employed by the vehicle owner.
It seemed like an open-and-shut case as liability was clear and supported by photographs.
However, I was informed that since the driver's work permit status was that of "construction worker", the insurer NTUC Income refused to pay a third-party claim from my authorised car service agent. Instead, it passed the liability on to the driver.
The official reply said that the investigation would take "quite some time" and suggested we claim from our own insurer instead.
My own insurance workshop agreed, saying that Income could invoke an exclusion clause involving construction workers driving commercial vehicles, which would leave me saddled with a huge bill.
Left with no alternative, I claimed from my own insurance, which could cost me my no-claim discount benefits and excess, and also result in higher premiums in future.
I was also allowed to get my car fixed only at one of my insurer's approved workshops, which may not be able to replace my car's sensors and sensitive electronic equipment.
As things stand, it seems the vehicle owner who breached his policy, the driver who committed the offence, and Income, can all refuse to pay for repairs to my car, which runs into several thousand dollars.
I am told the only other recourse for me is to bring the case to court, but this would entail legal costs, and there is no guarantee the driver of the car is in a position to pay.
This anomaly must be addressed. Errant vehicle owners and unauthorised drivers must be brought to book. Alternatively, those who fall under such exclusion clauses should not be issued driving licences at all.
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From an insurer’s perspective, ACE Insurance country president Mack Eng shared that one of the most challenging product lines is individual motor as claims ratios for this product is high due to various factors. “It is one of the products that continuously going through adjustments in pricing to ensure their continued viability for insurers,” he said.
AXA principal officer and chief executive officer (CEO) of AXA Insurance meanwhile warned that motor insurers “will have to be more cautious with the increasing number of cars, as third-party injury claims as well as fraudulent claims have been exponentially increasing in Asia, including Singapore.”
“Major motor players will have to focus on claims management and productivity to ensure profitability for this line of business,” he added.
AVIVA CEO Simon Newman echoed the same noting that “car insurers will have to focus on cost management to beat the trend of underwriting losses while ensuring premiums remain affordable.”
To address the challenge on cost management, AVIVA claims to be the first insurer in Singapore to offer car insurance solely online, direct to the customer. “With our online model, not only does it offer unprecedented convenience, it is a low-cost model that allows us to pass on cost savings to our customers,” said Mr. Newman.
In terms of claims management, AVIVA’s chief noted that car insurers will also have to review their processes to avoid fraudulent and inflated claims. “One way we are doing so at AVIVA is to encourage our customers to use our approved repairers by having a wide network of workshops so that it is convenient for our customers. We also guarantee approved repairs for 12 months,” Mr. Newman said.
read more
Anomaly where insurer, guilty parties can refuse to pay for car repairs
MY WIFE had the unfortunate experience of having her stationary car rear-ended by a commercial vehicle. The driver held a valid Singapore licence and was employed by the vehicle owner.
It seemed like an open-and-shut case as liability was clear and supported by photographs.
However, I was informed that since the driver's work permit status was that of "construction worker", the insurer NTUC Income refused to pay a third-party claim from my authorised car service agent. Instead, it passed the liability on to the driver.
The official reply said that the investigation would take "quite some time" and suggested we claim from our own insurer instead.
My own insurance workshop agreed, saying that Income could invoke an exclusion clause involving construction workers driving commercial vehicles, which would leave me saddled with a huge bill.
Left with no alternative, I claimed from my own insurance, which could cost me my no-claim discount benefits and excess, and also result in higher premiums in future.
I was also allowed to get my car fixed only at one of my insurer's approved workshops, which may not be able to replace my car's sensors and sensitive electronic equipment.
As things stand, it seems the vehicle owner who breached his policy, the driver who committed the offence, and Income, can all refuse to pay for repairs to my car, which runs into several thousand dollars.
I am told the only other recourse for me is to bring the case to court, but this would entail legal costs, and there is no guarantee the driver of the car is in a position to pay.
This anomaly must be addressed. Errant vehicle owners and unauthorised drivers must be brought to book. Alternatively, those who fall under such exclusion clauses should not be issued driving licences at all.
read more
New hotline for reporting insurance fraud
From today, members of the public who wish to report suspected cases of insurance fraud can call a new hotline by the General Insurance Association of Singapore (GIA).
The hotline, GI-FRAUD (1800 443 7283), can be used to alert the association to possible cases of insurance fraud, particularly in the motor insurance sector, where fraud cases are prevalent. Last year, the general insurance industry suffered S$140 million in losses from inflated and fraudulent motor insurance claims.
The GIA Anti-Fraud Committee is campaigning to educate the public on motor insurance fraud and its repercussions. It is also tracking fraudulent claims with the use of data analytics and advocating legislative changes to address the problem.
General insurance firms have set up their own investigative units dedicated to detecting and fending off fraud.
“We have to bear in mind that the cost of insurance fraud to insurers is a cost to everyone because industry losses from fraud must be recouped,” said GIA Executive Director Derek Teo. “Insurance fraud ... is everybody’s concern because we all pay the price.”
The GIA encourages the public to call the hotline if they have information on possible fraudulent claims filed with motor insurers, have been offered money by touts to submit inflated or fraudulent claims to motor insurers, or if they have evidence that they were the victim of a staged motor accident.
The hotline is open every weekday, from 9am to 5pm.
read more
Suspect insurance fraud? Call new hotline
Those who believe they have fallen prey to false or exaggerated insurance claims can from today call a hotline set up by an insurance body which wants to help fight fraud.
The General Insurance Association of Singapore (GIA) said in a statement yesterday that the hotline - 1800-44-37283 or GI-FRAUD - is part of a campaign to "educate the public on this supposedly 'victimless' crime and its repercussions".
It especially wants to know about motor insurance fraud from possible victims, who can call the hotline on weekdays, between 9am and 5pm.
They will be asked to give details about the purported fraud, such as staged accidents or being offered money to file inflated claims, GIA executive director Derek Teo told The Straits Times. Legitimate cases might even be referred to the authorities. But the hotline's main aim is to allow GIA to track fraudulent claims here, explained Mr Teo. The information could be used to push for tougher laws.
GIA, which represents 38 insurers such as NTUC Income, AIA Singapore and AXA Insurance, said insurers are also setting up their own special investigative units to detect and fend off fraud.
While the local insurance industry grew by 5.4 per cent last year to $3.34 billion in total gross premiums, it suffered $140 million in losses from inflated and fraudulent motor insurance claims during the same period. These losses undermine insurers' ability to offer lower premiums and be profitable.
Mr Teo said the price of insurance fraud "is a cost to everyone because industry losses from fraud must be recouped", adding: "We all pay the price."
NTUC Income, which insures about 250,000 vehicles, making it the leading motor insurer here, welcomed GIA's move as it "increases the industry's ability to work with the public to fight fraud".
Mr Peh Chee Keong, NTUC Income's vice-president (motor insurance), also pointed out that his firm already has its own anti-fraud schemes.For instance, it sends staff down to accident scenes to help customers and has set up a motor fraud investigation unit. Over the last three years, it has referred over 100 cases to the police, said Mr Peh.
read more
Insurers to combat fraudulent claims
A group of insurance professionals is forming a working group to find ways to combat fraud, especially exaggerated and inflated motor claims.
The group, which will be formed in the coming months, will be made up of representatives from the General Insurance Association of Singapore (GIA) and its members, and aims to tackle the problem in a structured and systematic way.
GIA president Derek Teo said in an interview with The Straits Times that although the industry has made progress in fighting certain aspects of insurance fraud, there are still loopholes to be closed.
For example, there is an increasing trend of motorists making inflated claims for personal injuries, instead of damage to their vehicles as was prevalent before, since new rules were introduced that allowed insurers to inspect vehicles before paying out a claim.
There have been cases in recent years of motorists making false or exaggerated personal injury claims of as much as $1 million after being involved in relatively minor accidents.
The working group will face a tough battle, acknowledged Mr Teo. "As long as there is motor insurance there will always be exaggerated claims," he said.
The association does not compile statistics on exaggerated claims, so it is difficult to estimate just how many such cases there are each year or whether they are on the rise.
Furthermore, it is not always easy to tell whether a motorist is making an exaggerated claim unless the numbers are glaring, Mr Teo noted.
However, what is clear is that such cases are still happening and the claims are becoming more outlandish, despite GIA attempts to stamp them out.
Aviva Singapore, for example, estimates that around a fifth of all car insurance claims it receives have been inflated to varying amounts.
NTUC Income said it believes that more than half of the injury claims and about one-third of the property damage claims it receives are, to varying degrees, inflated.
"We have to undertake further inspection in these cases and negotiate the claims," said Mr Peh Chee Keong, head of motor insurance at NTUC Income.
In 2008, GIA introduced the Motor Claims Framework, which requires motorists to file claims with their insurers within 24 hours of an accident.
Under the new rules, the insurer is also allowed to check the damaged vehicle before repair work is done.
As a result, cases of exaggerated claims for property damage have declined, Mr Teo said.
However, over the past three years, the number of personal injury claims has risen by 18 per cent even as the overall number of motor accidents has fallen by 9 per cent.
"We have quite successfully addressed inflated and fraudulent third party property damage claims to the point where the shift is now towards bodily injury claims," he said.
In a recent case that went all the way to the Court of Appeal, a motorist lodged a claim of almost $2 million after a minor accident.
Another driver had accidentally reversed her vehicle into the back of his car at 15kmh.
The driver said the whiplash from the accident had caused permanent disabilities that made it impossible for him to continue working as a teacher.
Eventually, the Court of Appeal ruled in January that since there was little evidence of the severity of his injuries, he should receive only about $90,000.
GIA's Mr Teo said motorists should be aware that if they exaggerate their claims, they will end up paying for it through higher premiums.
"When you add the sum total of all insurance companies' claims costs, you will get the industry total.
"When the industry's figures escalate, you will find that the industry is suffering a loss and this translates into premiums going up," he said.
read more
From today, members of the public who wish to report suspected cases of insurance fraud can call a new hotline by the General Insurance Association of Singapore (GIA).
The hotline, GI-FRAUD (1800 443 7283), can be used to alert the association to possible cases of insurance fraud, particularly in the motor insurance sector, where fraud cases are prevalent. Last year, the general insurance industry suffered S$140 million in losses from inflated and fraudulent motor insurance claims.
The GIA Anti-Fraud Committee is campaigning to educate the public on motor insurance fraud and its repercussions. It is also tracking fraudulent claims with the use of data analytics and advocating legislative changes to address the problem.
General insurance firms have set up their own investigative units dedicated to detecting and fending off fraud.
“We have to bear in mind that the cost of insurance fraud to insurers is a cost to everyone because industry losses from fraud must be recouped,” said GIA Executive Director Derek Teo. “Insurance fraud ... is everybody’s concern because we all pay the price.”
The GIA encourages the public to call the hotline if they have information on possible fraudulent claims filed with motor insurers, have been offered money by touts to submit inflated or fraudulent claims to motor insurers, or if they have evidence that they were the victim of a staged motor accident.
The hotline is open every weekday, from 9am to 5pm.
read more
Suspect insurance fraud? Call new hotline
Those who believe they have fallen prey to false or exaggerated insurance claims can from today call a hotline set up by an insurance body which wants to help fight fraud.
The General Insurance Association of Singapore (GIA) said in a statement yesterday that the hotline - 1800-44-37283 or GI-FRAUD - is part of a campaign to "educate the public on this supposedly 'victimless' crime and its repercussions".
It especially wants to know about motor insurance fraud from possible victims, who can call the hotline on weekdays, between 9am and 5pm.
They will be asked to give details about the purported fraud, such as staged accidents or being offered money to file inflated claims, GIA executive director Derek Teo told The Straits Times. Legitimate cases might even be referred to the authorities. But the hotline's main aim is to allow GIA to track fraudulent claims here, explained Mr Teo. The information could be used to push for tougher laws.
GIA, which represents 38 insurers such as NTUC Income, AIA Singapore and AXA Insurance, said insurers are also setting up their own special investigative units to detect and fend off fraud.
While the local insurance industry grew by 5.4 per cent last year to $3.34 billion in total gross premiums, it suffered $140 million in losses from inflated and fraudulent motor insurance claims during the same period. These losses undermine insurers' ability to offer lower premiums and be profitable.
Mr Teo said the price of insurance fraud "is a cost to everyone because industry losses from fraud must be recouped", adding: "We all pay the price."
NTUC Income, which insures about 250,000 vehicles, making it the leading motor insurer here, welcomed GIA's move as it "increases the industry's ability to work with the public to fight fraud".
Mr Peh Chee Keong, NTUC Income's vice-president (motor insurance), also pointed out that his firm already has its own anti-fraud schemes.For instance, it sends staff down to accident scenes to help customers and has set up a motor fraud investigation unit. Over the last three years, it has referred over 100 cases to the police, said Mr Peh.
read more
Insurers to combat fraudulent claims
A group of insurance professionals is forming a working group to find ways to combat fraud, especially exaggerated and inflated motor claims.
The group, which will be formed in the coming months, will be made up of representatives from the General Insurance Association of Singapore (GIA) and its members, and aims to tackle the problem in a structured and systematic way.
GIA president Derek Teo said in an interview with The Straits Times that although the industry has made progress in fighting certain aspects of insurance fraud, there are still loopholes to be closed.
For example, there is an increasing trend of motorists making inflated claims for personal injuries, instead of damage to their vehicles as was prevalent before, since new rules were introduced that allowed insurers to inspect vehicles before paying out a claim.
There have been cases in recent years of motorists making false or exaggerated personal injury claims of as much as $1 million after being involved in relatively minor accidents.
The working group will face a tough battle, acknowledged Mr Teo. "As long as there is motor insurance there will always be exaggerated claims," he said.
The association does not compile statistics on exaggerated claims, so it is difficult to estimate just how many such cases there are each year or whether they are on the rise.
Furthermore, it is not always easy to tell whether a motorist is making an exaggerated claim unless the numbers are glaring, Mr Teo noted.
However, what is clear is that such cases are still happening and the claims are becoming more outlandish, despite GIA attempts to stamp them out.
Aviva Singapore, for example, estimates that around a fifth of all car insurance claims it receives have been inflated to varying amounts.
NTUC Income said it believes that more than half of the injury claims and about one-third of the property damage claims it receives are, to varying degrees, inflated.
"We have to undertake further inspection in these cases and negotiate the claims," said Mr Peh Chee Keong, head of motor insurance at NTUC Income.
In 2008, GIA introduced the Motor Claims Framework, which requires motorists to file claims with their insurers within 24 hours of an accident.
Under the new rules, the insurer is also allowed to check the damaged vehicle before repair work is done.
As a result, cases of exaggerated claims for property damage have declined, Mr Teo said.
However, over the past three years, the number of personal injury claims has risen by 18 per cent even as the overall number of motor accidents has fallen by 9 per cent.
"We have quite successfully addressed inflated and fraudulent third party property damage claims to the point where the shift is now towards bodily injury claims," he said.
In a recent case that went all the way to the Court of Appeal, a motorist lodged a claim of almost $2 million after a minor accident.
Another driver had accidentally reversed her vehicle into the back of his car at 15kmh.
The driver said the whiplash from the accident had caused permanent disabilities that made it impossible for him to continue working as a teacher.
Eventually, the Court of Appeal ruled in January that since there was little evidence of the severity of his injuries, he should receive only about $90,000.
GIA's Mr Teo said motorists should be aware that if they exaggerate their claims, they will end up paying for it through higher premiums.
"When you add the sum total of all insurance companies' claims costs, you will get the industry total.
"When the industry's figures escalate, you will find that the industry is suffering a loss and this translates into premiums going up," he said.
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Singapore steps up efforts against fraudsters
At least 3 masterminds of motor insurance fraud scams were sentenced to jail over the last 2 years, says MAS.
In a welcome address delivered by Luz Foo, Executive Director, Monetary Authority of Singapore at the GIA Combating Insurance Fraud Seminar yesterday (July 25), the official boasted that the Singapore insurance industry has recently stepped up its co-operation with the enforcement agencies, and the results are encouraging.
Citing a 2011 study by KPMG of companies across a range of industries, Ms Foo said that one in four respondents were aware of fraud occurring within their organisation at least once in the past two years.
hence, given the financial impact of fraud on policyholders and insurers, the insurance industry took firm and effective actions to deter, detect and mitigate the risk of fraud.
Here's more from Ms Foo:
- See more at: http://sbr.com.sg/financial-services/news/singapore-steps-efforts-against-fraudsters#sthash.ydIWp0el.dpuf
t is not easy to battle fraud that is committed against the insurer. Very often, it is difficult to prove that fraud has taken place especially when there is collusion amongst various parties.
The Singapore insurance industry has recently stepped up its co-operation with the enforcement agencies, and the results are encouraging. Over the last two years, at least three masterminds of motor insurance fraud scams were sentenced to jail .Each of these scams involved six to nine other accomplices who were also convicted. The closer co-operation with enforcement agencies is a step in the right direction.
But more can be done. The industry needs to take a more collaborative approach in tackling the problem than it currently does.
One area where collaboration can be increased is consumer education. Consumers are critical stakeholders in the fight against insurance fraud. Surveys carried out in other countries have shown that many people think it is acceptable to exaggerate insurance claims. Insurers will need to educate consumers to remain vigilant against bad and misleading advice from third parties, and to raise their awareness that the victims of fraudulent claims are ultimately the policyholders themselves.
Another area for collaboration is to have greater sharing of information relating to fraud. Unless insurers have an effective way to share their suspicions, the perpetrators of fraud can simply move from one insurer to the next. In many countries, the establishment of industry databases on suspicious claims and the use of powerful analytics have proven beneficial. These have enhanced the ability of insurers to identify potential fraudsters and fraudulent transactions at an early stage, and to take the necessary remedial actions, including co-operating with enforcement agencies.
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New motor insurance policy targets drivers aged over 65
As the number of senior drivers aged over 65 increases amid a greying population, so have their motor insurance premiums.
As a result, the Automobile Association of Singapore (AA) has partnered Liberty Insurance to launch a new motor insurance policy aimed at senior drivers aged over 65.
The introduction of the AA Senior Motor Plus policy follows a rise in the number of complaints among senior drivers about having to pay higher motor insurance premiums after they turned 65.
Some were even denied coverage because of their age.
Speaking at the policy’s launch yesterday, AA President Bernard Tay said: “This oft-neglected group of drivers is often perceived by insurers as having slower reflexes, reduced concentration, impaired vision and motor functions, rendering them at a higher risk of accidents on the road.”
He pointed out that senior drivers, in fact, have many years of driving experience, are more stable and are less likely to speed or take unnecessary risks.
Liberty Insurance Chief Executive Officer Luiz Campos said research into the driving patterns of senior drivers showed that since many of them were retired, they usually drove during off-peak hours when the traffic was lighter.
Currently, senior drivers make up about 14 per cent of AA’s 83,000 members. Under AA’s new policy, those insured will pay a stagnant premium rate from age 65 to 75, after which their policies will be reviewed based on factors such as driving experience, claims record and type of car driven.
Drivers must have four or more years of driving experience and will be provided with S$50,000 in personal accident benefits. A 5 per cent discount will also be given to eligible policyholders with 30 or more years of driving experience and who have made no claims in the last three years.
Retiree Richard Yue, 67, welcomed the new policy. Mr Yue, who has 25 years of driving experience, is paying a motor insurance premium of S$870 a year, with an excess of S$600.
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As the number of senior drivers aged over 65 increases amid a greying population, so have their motor insurance premiums.
As a result, the Automobile Association of Singapore (AA) has partnered Liberty Insurance to launch a new motor insurance policy aimed at senior drivers aged over 65.
The introduction of the AA Senior Motor Plus policy follows a rise in the number of complaints among senior drivers about having to pay higher motor insurance premiums after they turned 65.
Some were even denied coverage because of their age.
Speaking at the policy’s launch yesterday, AA President Bernard Tay said: “This oft-neglected group of drivers is often perceived by insurers as having slower reflexes, reduced concentration, impaired vision and motor functions, rendering them at a higher risk of accidents on the road.”
He pointed out that senior drivers, in fact, have many years of driving experience, are more stable and are less likely to speed or take unnecessary risks.
Liberty Insurance Chief Executive Officer Luiz Campos said research into the driving patterns of senior drivers showed that since many of them were retired, they usually drove during off-peak hours when the traffic was lighter.
Currently, senior drivers make up about 14 per cent of AA’s 83,000 members. Under AA’s new policy, those insured will pay a stagnant premium rate from age 65 to 75, after which their policies will be reviewed based on factors such as driving experience, claims record and type of car driven.
Drivers must have four or more years of driving experience and will be provided with S$50,000 in personal accident benefits. A 5 per cent discount will also be given to eligible policyholders with 30 or more years of driving experience and who have made no claims in the last three years.
Retiree Richard Yue, 67, welcomed the new policy. Mr Yue, who has 25 years of driving experience, is paying a motor insurance premium of S$870 a year, with an excess of S$600.
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