Sales of travel insurance have soared in Singapore, but the growth comes along with the rising number of clients making fraudulent claims, industry players say.
Travel insurance – along with personal accident and health – accounted for 21.6% or SG$781mn of the total general insurance business in 2015, up from SG$711 million in 2014 and SG$628 million in 2013 The Straits Times
According to General Insurance Association (GIA) chief executive Derek Teo, about 20% of claims are falsified, with fake documents, overstated values and repeated claims being among the common types of fraud.
Teo said some people file fake claims thinking that they can recover travelling expenses from their insurance policies.
“Some are so bold as to file police reports on the theft of items such as a wallet, even though it didn't happen,” The Straits Times
quoted him as saying.
Singapore and Sompo Insurance Singapore told the publication that most fraudulent travel claims are “small-scale, opportunistic incidents” such as bogus declarations for lost baggage or fabricated medical treatment.
Singapore is among the companies hit by fake insurance claims, having seen a 130% rise in such claims last year.
"As the number of people taking up travel insurance rises, so too has the incidence of people making false or inflated insurance claims,” Shane Lowndes, AIG
Singapore's head of claims and operations, told The Straits Times
Sompo Insurance Singapore also saw a 30% increase in the number of cases considered as fraud or “soft fraud” that needed a more in-depth probe.
"The majority of the cases are soft fraud cases, that is, exaggerated claims,” Sompo chief distribution officer Koh Yen Yen was quoted as saying. "For many of the highly suspicious fraud cases, when we start asking more questions, some insured persons do back off."
With the rising number of false claims, the GIA recently formed an Accident and Health Workgroup to track such claims and build a database. Teo said the body will study trends in travel insurance claims with specific focus on fraud.