Financial Crime World

Insurance Fraud Detection Techniques in New Zealand Get Boost with Launch of Insurance Fraud Bureau

The Insurance Council of New Zealand (ICNZ) has launched a new agency, the Insurance Fraud Bureau (IFB), aimed at reducing the estimated $614 million annual cost of insurance fraud to the industry. The IFB will enable insurance providers to share data and cooperate to combat fraudulent activity.

Insurance Fraud in New Zealand: A Growing Concern

According to ICNZ’s white paper on the matter, insurance fraud continues to plague the general insurance sector despite efforts to curb it. The organization believes that educating the public about insurance fraud is crucial in reducing instances of fraudulent activity.

The Insurance Fraud Bureau (IFB) - A New Approach

The IFB is modeled after similar organizations established in the United Kingdom and Australia, with a sole purpose of reducing insurance fraud. It will allow competing organizations to share information and collaborate on a pan-industry approach to combating fraud.

Key Features of the Insurance Fraud Bureau (IFB)

  • All ICNZ members are part of the IFB, allowing general insurers in New Zealand to work together for the first time to reduce the impact of insurance fraud on customers.
  • The IFB will enable insurance providers to share data and cooperate to combat fraudulent activity.
  • It may also provide a new channel for members to take legal action against offenders.

Educating the Public about Insurance Fraud

ICNZ’s chief executive Tim Grafton emphasized the importance of educating the public about insurance fraud, stating that the organization wants to make people aware that cheating on claims is not only illegal but also has a collective cost for everyone else. Grafton noted that previous attempts to tackle insurance fraud in New Zealand have not been coordinated across the industry, but the IFB will change this.

Defining Insurance Fraud

The ICNZ discussion document defines fraud as wrongful or criminal deception intended to result in financial or personal gain, and notes that the moral ambiguity surrounding some types of fraud is exacerbated by short sentences handed out to offenders.