The Insurance Council of New Zealand (ICNZ) has announced the launch of the Insurance Fraud Bureau (IFB) - an initiative bringing all of ICNZ’s members together to combat insurance fraud.
Speaking at a press conference in Wellington, ICNZ chief executive Tim Grafton said that insurance fraud is often perceived as a “victimless crime” by policyholders, and fraud can range from opportunistic exaggeration of claims to organised arson or theft.
The newly-formed IFB’s network will cover over 95% of New Zealand’s general insurance sector, and its primary purpose will be to educate New Zealanders about insurance fraud and provide a central point of contact for all insurance fraud issues. It will also gather hard data about the prevalence, cost and patterns of insurance fraud in New Zealand.
“This is the first integrated initiative under the umbrella of ICNZ to educate the public about insurance fraud, and to help its detection,” Grafton said.
“In insurance, the majority pay for the misfortunes of a few, so when people make false claims and commit fraud, it’s a cost to everyone. The IFB will be providing public education, and we will have a hotline for people to report suspected insurance fraud.”
Grafton says that while there is no solid data on New Zealand’s levels of insurance fraud, an estimate based on international figures would put the annual cost at approximately $614 million. He says that through the IFB’s efforts, he would hope to see insurance fraud reduced by 10% within 12 months.
“$600+ million is a very significant cost, but police resources can’t always be directed towards that area,” Grafton says.
“The UK established an Insurance Fraud Bureau some years ago, and that has been particularly effective in cutting down on fraud. We can see that it’s an effective way of helping reduce the costs of fraud across the sector.”
ICNZ’s Insurance Claims Register (ICR) manager Yvonne Wynyard has been appointed manager of the IFB. A fraud white paper has also been released as part of the launch.