Insurance moves on sector fraud

The insurance industry is in the process of setting up an insurance crimes bureau amid rising fraudulent claims.

BY FIDELITY MHLANGA

Insurance Council Zimbabwe (ICZ) technical administration officer, Nicholas Sayi told journalists attending a ZimSelector insurance and mentorship programme last week that an independent bureau modelled along the South African Insurance Crime Bureau was on cards.

“We are in the process of setting up an independent bureau to assist the industry to prevent or investigate such crimes. We expect that it will be put in place any time before the end of second quarter of this year,” he said.

“In terms of the set-up, it’s going to be independent, modelled along the South Africa Insurance Crime Bureau as you know that we are a start-up.”

Formed in 2008, South Africa’s Insurance Crime Bureau has over the years initiated various initiatives to address organised crime in the industry as well as a number of educational efforts aimed at the public to create awareness of insurance fraud scams.

Old Mutual senior business development manager, Immaculate Musonza said between 30% and 40% of claims put forward by insurance policy holders were fraudulent, threatening the viability of insurance companies in Zimbabwe.

“Fraudulent claims [are mainly] traffic cases, where someone comes with a fake police report. You know our police, if someone goes with money and gives them, they give you the report you want. It is these insurance risks that make some insurance companies close,” she said

Musonza said an internal investigation team normally deals with such problems so that if the client insists that the disputed claim is genuine, the case is taken to court.
Apart from the rise of fraudulent claims, the insurance sector is battling with failure to pay premiums and under insuring, with firms collapsing due to high claims and low premiums.

Last year, Insurance and Pension Commission commissioner, Tendai Karonga said the local insurance industry was losing close to $165 million yearly through duplicitous activities.

In 2016, Old Mutual Assurance Company suffered from insurance fraud caused by a nurse, who preyed on terminally ill-patients admitted at Kwekwe General Hospital in cahoots with her boyfriend.


Last year, there was a case of syndicate insurance fraud involving a National University of Science and Technology student attached at a local insurance firm, who was implicated in $12 000 motor insurance fraud.

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