Shs4.9b reported in insurance fraud
Listed. Medical insurance schemes are listed as some of the components that were faced with fraud in the period between January and September 2019.
What you need to know:
- Fraudulent insurance claims. Figures from Insurance Regulatory Authority (IRA) indicate that fraudulent insurance claims increased from Shs3b in 2018 to nearly Shs5b in 2019, from the beginning of the year to September.
- Reiterating IRA advice, Mr Allan Mafabi, the Britam Insurance chief executive officer, said the challenge of fraud is exacerbated by the organised crime and innovation by fraudsters and capacity limitations by insurers to tackle them.
Fraudulent claims worth Shs4.9b were reported to Insurance Regulatory Authority during the period between January and September 2019.
A claim is a formal request by an insured party to an insurance company for compensation of a covered loss.
Figures from the Insurance Regulatory Authority (IRA) indicate that more fraudulent insurance claims were recorded in 2019 compared to 2018.
“Fraudulent claims increased from Shs3b in 2018 to nearly Shs5b in 2019, from the beginning of the year to September,” Mr Ibrahim Kaddunabbi Lubega, the IRA chief executive officer, said during the 44th CEO breakfast meeting held in Kampala early this week.
Similar to last year, credit guarantee bonds ranked highest on the list of fraudulent claims reported with over 90 per cent of the total lot at Shs3.6b.
Credit guarantee bonds are assurances given by insurance companies to a third party committing to compensate them in case of failure by the insured to pay.
Issuing fake policies and forgeries rallied up Shs325m while motor related schemes recorded fraud cases worth Shs302m.
Burglary claims, fidelity guarantees, cash in transit as well as suppressed premiums by agents also amassed a substantial amount of high value fraud cases.
IRA urged insurers to take up measures such limiting human contact and enhanced use of information technology to control or prevent fraud.
“Perform pre-employment and in-employment screening of staff,” Mr Kaddunabbi said, urging insurers to develop an anti-fraud policy.
Reiterating IRA advice, Mr Allan Mafabi, the Britam Insurance chief executive officer, said the challenge of fraud is exacerbated by the organised crime and innovation by fraudsters and capacity limitations by insurers to tackle them.
Lack of capability
Used machinery: According to Mr Allan Mafabi, the Britam Insurance chief executive officer, fraudsters import old used machinery from China and over value them which they get away with because assessors do not have the capability of valuing those machines.
