Singapore steps up efforts against fraudsters

At least  3 masterminds of motor insurance fraud scams were sentenced to jail over the last 2 years, says MAS.

In a welcome address delivered by  Luz Foo, Executive Director, Monetary Authority of Singapore at the GIA Combating Insurance Fraud Seminar yesterday (July 25), the official boasted that the Singapore insurance industry has recently stepped up its co-operation with the enforcement agencies, and the results are encouraging.

Citing a 2011 study by KPMG of companies across a range of industries, Ms Foo said that one in four respondents were aware of fraud occurring within their organisation at least once in the past two years.

hence, given the financial impact of fraud on policyholders and insurers,  the insurance industry took firm and effective actions to deter, detect and mitigate the risk of fraud.

Here's more from Ms Foo:

It is not easy to battle fraud that is committed against the insurer. Very often, it is difficult to prove that fraud has taken place especially when there is collusion amongst various parties.

The Singapore insurance industry has recently stepped up its co-operation with the enforcement agencies, and the results are encouraging. Over the last two years, at least three masterminds of motor insurance fraud scams were sentenced to jail .Each of these scams involved six to nine other accomplices who were also convicted. The closer co-operation with enforcement agencies is a step in the right direction.

But more can be done. The industry needs to take a more collaborative approach in tackling the problem than it currently does.

One area where collaboration can be increased is consumer education. Consumers are critical stakeholders in the fight against insurance fraud. Surveys carried out in other countries have shown that many people think it is acceptable to exaggerate insurance claims. Insurers will need to educate consumers to remain vigilant against bad and misleading advice from third parties, and to raise their awareness that the victims of fraudulent claims are ultimately the policyholders themselves. 

Another area for collaboration is to have greater sharing of information relating to fraud. Unless insurers have an effective way to share their suspicions, the perpetrators of fraud can simply move from one insurer to the next. In many countries, the establishment of industry databases on suspicious claims and the use of powerful analytics have proven beneficial. These have enhanced the ability of insurers to identify potential fraudsters and fraudulent transactions at an early stage, and to take the necessary remedial actions, including co-operating with enforcement agencies.