KUALA LUMPUR, May 29 — Insurance fraud continues to grow at an alarming pace worldwide with the magnitude to some extent aggravated by technological advancement, Bank Negara Malaysia (BNM) Deputy Governor Datuk Muhammad Ibrahim said.
He said in the UK, home to the biggest insurance market in Europe and the world’s third largest, insurance claims fraud exceeded £2.1 billion, of which nearly 60 per cent concentrated in the motor (vehicle) insurance.
He said the situation was no different in Malaysia as insurance fraud was also serious in motor segment, with an estimated loss of RM760 million suffered by insurers and takaful operators in 2013 alone.
As consumer-centric channels such as mobile and online applications continue to expand worldwide, so will the risk of fraud, Muhammad said in his keynote address at the Insurance Information & Ratemaking Forum of Asia 2015 (IIRFA), here recently.
“Fraudsters can now perform more complicated, expensive and elusive fraud, for example, through the internet fraud could be committed virtually, while being protected through a shield of anonymity,” he said.
Muhammad said this is where ratemaking organisations could play a significant role in addressing fraud, especially at the industry level.
The wealth of data in their possession would enable ratemaking organisations to aggregate and synthesise data to form representative fraud patterns and trends, he said.
He said at the local front, Insurance Services Malaysia (ISM) and Motordata Research Consortium were examples of ratemaking agencies that provided value-added data analytics to the industry.
The Fraud Intelligence System (FIS) currently being developed by ISM is an exciting proposition in the Malaysian insurance and takaful industries.
The FIS will initially focus on the motor segment, with an eventual goal to cover all insurance and takaful classes.
This is a significant initiative to combat fraud, he said, adding that combating fraud has no finality and must be addressed on a continuous basis. — Bernama
