Financial Crime World

Improved Intelligence Networks Needed to Combat Insurance Fraud

Insurance fraud is a significant problem in New Zealand that can have far-reaching consequences for policyholders and the industry as a whole. To effectively combat this issue, a concerted effort is required from law enforcement agencies, government bodies, insurance companies, and other stakeholders.

The Impact of Insurance Fraud

Insurance fraud detection and investigation can be costly and time-consuming, making it challenging for insurers to raise concerns publicly due to reputational damage. However, collaboration between organizations could help mitigate this issue.

The Role of the Insurance Fraud Bureau (IFB)

The IFB aims to reduce the impact of insurance fraud by:

  • Educating consumers about its consequences
  • Providing a central point of contact for issues
  • Developing strong relationships with multi-agency partners
  • Researching national and international trends
  • Providing cost-effective intelligence support to member companies
  • Working to remove negative “brand” effects from insurers when dealing with fraudulent cases

Promoting Greater Awareness and Education

The IFB plans to promote greater media awareness and public education about the cost of fraud, dispelling the myth that it is a victimless crime. The organization will also focus on developing emerging technologies that can enhance anti-fraud measures and provide a forum for sharing fraud information and detection processes.

Quotes from Industry Experts

“The creation of an IFB in New Zealand will align with the global trend of pushing the anti-insurance fraud message,” said [Name], Director of the IFB. “By combining resources and expertise, we can detect, deter, and prevent insurance fraud, ultimately protecting policyholders.”

Benefits of an IFB

The benefits of an IFB include:

  • Lessening the financial impact of fraud on the industry
  • Not passing the cost of fraud to policyholders
  • Combating insurance fraud, a significant cause of industry leakage that requires a collaborative approach

References

  • American Insurer, Fighting Insurance Fraud: Survey of Insurer Anti-Fraud Efforts (2001)
  • Dionne, G. (2000) The Empirical Measure of Information Problems with Emphasis on Insurance Fraud, Chapter 12 in Dionne, G (ed.), Handbook of Insurance. Boston, MA: Kluwer Academic Publishers.
  • Duffield, G and Grabosky, P. (2001). The Psychology of Fraud in Australian Institute of Criminology, trends & issues in crime and criminal justice, vol 199, March 2001
  • Oxford English Dictionary online. https://en.oxforddictionaries.com/definition/fraud
  • Maslow, A.H. (1943). Theory of Human Motivation
  • Sparrow, M.K. (1998) Fraud Control in the Health Care Industry: Assessing the State of the Art, Research in Brief. Washington, D.C.: National Institute of Justice
  • Stotland, E. (1977) White collar criminals, Journal…