Insurance Fraud Detection Techniques Cracked in NZ: Insurers Unite Against Fraudulent Claims

New Zealand’s insurance industry has launched a major crackdown on insurance fraud with the establishment of the Insurance Fraud Bureau (IFB) in September 2019. The move aims to tackle the growing problem of dishonest claims and illegal activities by insurers, which cost billions globally.

The Problem of Insurance Fraud

According to experts, most insurance fraud occurs at claim time, with exaggerated or fabricated losses being a common tactic. This includes:

• Staged events such as arson and vehicle theft
• Non-disclosure of critical information required by insurers to accurately assess risk

Introducing the Insurance Fraud Bureau (IFB)

The IFB is an industry-first initiative launched by the Insurance Council of New Zealand (ICNZ), bringing together all 28 member companies in a bid to detect and prevent fraudulent claims. The bureau’s mission is to:

• Educate the public on the risks and consequences of insurance fraud
• Develop sophisticated detection techniques to identify and investigate suspicious activities

The Impact of Non-Disclosure

Industry insiders say that non-disclosure of critical information is a significant contributor to fraudulent claims, with policyholders failing to disclose pre-existing conditions or other relevant details that can impact premiums. This lack of transparency:

• Results in inflated payouts
• Undermines the integrity of the insurance system as a whole

The IFB’s Impact on Reducing Insurance Fraud

The IFB’s efforts are expected to have a significant impact on reducing insurance fraud in New Zealand, which is estimated to cost the industry millions annually. With its integrated approach, the bureau aims to:

• Stay one step ahead of fraudulent claims
• Protect honest policyholders
• Maintain the trust and confidence of the public

By working together to detect and prevent insurance fraud, insurers can ensure a fairer and more transparent system for all stakeholders.