A long way to go in weeding out inflated and fraudulent claims

We refer to the recent letters on inflated and fraudulent claims arising out of motor accidents ("Must insurer pay out claim if vehicle is not damaged?" by Mr Jimmy Lauw Thian Chye, Nov 4; "Set up agency to investigate questionable insurance claims" by Mr Goh Poh Thiam , last Wednesday; and "Ensure private motor insurance settlements don't get out of hand" by Mr Ng Chee Kheon, last Friday.)

Since 2009, the General Insurance Association of Singapore (GIA) has worked tirelessly to combat this plague termed "inflated and fraudulent" motor claims.

These illegal claims, estimated to amount to $140 million a year, have resulted in insurers' bottom lines haemorrhaging since 2008 and all motorists having to bear higher premiums.

The Motor Claims Framework was implemented by all motor insurers to ensure clear standards and prompt reporting of accidents within 24 hours, thereby reducing the potentiality of uncorroborated accounts of accidents.

The State Courts have implemented a Non-Injury Motor Accident pre-inspection protocol to allow damaged vehicles to be surveyed before repairs can commence.

To further encourage reporting of accidents, motor insurers collectively agreed last year not to dock their insured's no-claim discount, should their insured be found not at fault for an accident.

In addition, the GIA has implemented a hotline (1800-443-7283) for members of the public and motorists to report staged accidents and suspected fraudulent claims, for further investigation.

The GIA has also embarked on regular consumer education programmes on radio as well as in newspapers under the "General Insurance & You" series.

These efforts have led the net incurred claims for the industry's motor business to decrease from $742 million in 2008 to $542 million last year. The improved losses resulted in stabilisation or a decrease in average motor vehicle premiums in recent years.

Nevertheless, the journey to weed out inflated and fraudulent claims is a long one.

The GIA believes that collusion between motor surveyors and unethical workshops (which are mostly not authorised reporting centres registered with the GIA) to inflate claims continues to be widely practised, and will not go away unless appropriate government agencies are prepared to work with relevant stakeholders to study the issues, review the road accident reporting protocol, claims-handling protocol, and court practice directions and protocol, and make recommendations to stop the unethical practice of exploiting the claims-handling process when liability is in favour of the aggrieved party.

Derek Teo

Executive Director

General Insurance Association of Singapore

A version of this article appeared in the print edition of The Straits Times on November 23, 2015, with the headline 'A long way to go in weeding out inflated and fraudulent claims'. Print Edition | Subscribe