A year after the painful sale of its Argentine workers’ compensation business, Australia’s biggest global insurer has clamped down on fraud and excessive claims as it fortified its governance structure in its Colombian liability business.
David Fried, QBE emerging markets chief executive, told The Australian
that the $17 billion insurance giant had learned from the fiasco with Argentine workers, and was now using its Indian data analytics centre to detect patterns in insurance claims that could spell more serious and systematic problems for the company - starting with the Colombian market.
“It’s one of the first times I’ve known that this has been done in a Latin American context,” Fried said. “We were able to see where there was fraud, an over-abundance of claims, and where hospitals might be overcharging.”
Similarly to Australia, third-party motor insurance is compulsory in Colombia, where the program is known as SOAT, and just as fraught with issues.
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“We’re continuously analysing our portfolios around the world, understanding movements and being able to actually understand any issues prior to them becoming more problematic for the organisation,” Fried continued.
In a country plagued by political violence, warring drug gangs, and contested land controlled by rebels and illegal narcotics traders, Fried said QBE was able to identify a combination of high rates of accidents, higher rates of injury in certain geographic areas, and higher rates being charged by medical clinics in certain parts of Colombia.
“It was also automobiles travelling into certain areas, perhaps experiencing other issues, and what that’s allowed us to do is to build a database of murders and licence plates,” Fried said. “Knowing cars that are going into these areas and making sure we’re not insuring them, making sure we’re stopping doing business in certain areas,” he said.
QBE was also able to inform the government about the fraudulent overcharging of several medical facilities in the country, which led to hospitals getting fined.
In 2015, QBE divested its Argentine workers’ compensation business after regulatory changes in 2012 which allowed employees to file for a wide range of claims, triggering an explosion of lawsuits that dislodged the sustainability of the insurance model.
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