Insurance industry launches Insurance Fraud Bureau (IFB)
Today, the Insurance Council of NZ launched the Insurance Fraud Bureau (IFB), New Zealand’s first integrated initiative to target insurance fraud through detection and education.
Until now, work to address general insurance fraud in New Zealand hasn’t been coordinated across the industry. The IFB will change that. All ICNZ’s members are members of the IFB, which means that for the first time, general insurers in New Zealand will be working together to reduce the impact of insurance fraud on all customers.
Insurance fraud is illegal in New Zealand and yet it is common to hear people talk about inflating insurance claims or claiming for accidents that didn’t happen. For some people, this is seen as getting what’s owed to them by their insurer. At the other end of the spectrum, insurance fraud can be a means to financing organised crime.
Insurance fraud is a cost to every policyholder. It costs insurers in New Zealand up to 10% of gross written premiums (GWP) every year. At current estimates, this is up to $614 million. This cost is shared by everyone who has insurance because it increases how much insurers have to pay out in claims. The more insurers pay, the more they need to charge in premiums to cover those costs.
Insurers want to help their customers understand that insurance fraud is illegal and the impacts it can have on them. In addition to the costs it places on all policyholders, people caught committing insurance fraud risk not only prosecution but cancellation of their insurance policies and an inability to get any insurance in the future.
The IFB will take a lead role in
- educating New Zealanders about insurance fraud
- providing a central point of contact for general insurance fraud issues and allegations of insurance fraud
- developing a centre of excellence for anti-fraud initiatives
- researching national and international trends
- developing strong multi-agency relationships
- analysing and working with insurance fraud data in New Zealand to help find and reduce instances of insurance fraud.
As part of the launch, a fraud whitepaper and an IFB website have been developed to kick off the education and reporting aims.