Insurance companies have seen rising fraud claims cases in the recent past, worsening with increasing economic difficulties.
According to insurance companies, some fraudulent clients are filing frivolous claims in cases when they ordinarily would not, and this has been linked to economic difficulties and hardship.
“We have seen some clients file claims in more than one insurance company when they encounter an accident, and this amounts to double insurance, one of the industry CEO’s said.
According to the CEO, some clients want to make gains on their claims, most time far above the cost of repairs in the case of a vehicle accident.
Olumide Ibidapo, managing director/CEO, FBN Insurance Brokers Limited in an interview with Business Day listed some of the measures insurers can take to reduce claims fraud in the industry.
Ibidapo said fraud is a significant problem in the Nigerian insurance industry, and it has a significant impact on insurance companies, policyholders, and the economy as a whole.
Read also: NSC: Driving port efficiency through fight against corruption
To combat fraud, the players in the Nigerian insurance industry can take several measures, including Conduct Proper Due Diligence, Improve Risk Assessment, Increase Awareness, Use Of Technology, and Law Enforcement.
Conduct Proper Due Diligence: Insurance companies need to conduct proper due diligence before issuing policies to customers. This involves verifying the identity, financial status and claims history of the policyholder to identify any potential fraud indicators.
Improve Risk Assessment: Insurance companies can implement advanced risk assessment methods to evaluate the likelihood of fraud by customers. This can include the use of data analytics and artificial intelligence to analyze customer behaviour and identify suspicious patterns.
Increase Awareness: Insurance companies can increase awareness among customers about the consequences of fraudulent activities. This can include educating customers on the penalties for fraud and the impact of fraud on the insurance industry and society as a whole.
Use of Technology: Insurance companies can leverage technology to reduce the risk of fraud. Technology can be used to track all transactions, making it difficult to manipulate or falsify data. Smart underwriters can automate the claims process, reducing the potential for human error and fraud.
Law Enforcement: Law enforcement can play a crucial role in combatting insurance fraud by actively investigating and prosecuting cases of fraud. This involves collaboration between insurers, law enforcement agencies, and regulatory bodies to detect and report suspected fraud, gather evidence, and bring perpetrators to justice.
Law enforcement can also help deter potential fraudsters through public awareness campaigns, targeted investigations, and harsh penalties for those convicted of fraud
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
