New Zealand’s insurance industry has launched a fraud-fighting bureau to prevent crimes estimated to cost insurers up to NZ$614m a year.
The Insurance Fraud Bureau New Zealand (IFB) will provide a central point of contact, take a lead on education, develop multi-agency relationships and offer an industry wide co-ordinated approach and greater scale in addressing the problem.
IFB Manager Yvonne Wynyard said that a small number of people are costing their fellow policyholders a significant amount each year through fraudulent claims and she is hoping that with a greater focus on fraud education, and with more resources going to detection, rates of insurance fraud will reduce. Ms Wynyard added that the initiative has been in the works for a couple of years with similar bureaus in both Australia and the UK having proved successful and shown how much of a problem fraud is for their respective insurance sectors.
The new bureau has been established by the Insurance Council of New Zealand (ICNZ) as technology evolves and criminals become more dynamic and sophisticated.
In 2017 the Australian bureau, which was formed by the Insurance Council of Australia in 2010, assisted in detecting $280m in fraudulent claims. An estimate of the value of undetected insurance fraud in the Australian market is not currently available.
Fraud costs for the New Zealand industry are not currently measured but national and international estimates suggest gross written premium impacts of 7% to 15%.
An IFB white paper said that it takes a concerted team effort to fight back against insurance fraudsters and that no individual organisation or agency has the resources to single-handedly stop it. The paper notes that insurance crime is often perceived as victimless but it effects costs and leads to increased premiums.
ICNZ has already been active in tackling fraud after developing an Insurance Claims Register which allows members to share and view information which can raise red flags. ICNZ also has an online and phone tip-off service which will be taken over by the new bureau and given a higher profile.