The latest notable development in this area is the recent launch of New Zealand’s very own Insurance Fraud Bureau (IFB), an initiative of the Insurance Council of New Zealand (ICNZ). It is the country’s first integrated initiative to battle insurance fraud via improved education and detection efforts.
Up until the launch of New Zealand’s IFB at the beginning of September, there has been a much-discussed lack of co-ordination in anti-fraud efforts in the country. The new IFB, it is hoped, will bring that era to an end; all members of the ICNZ will automatically become members of the IFB, meaning that New Zealand’s general insurers will now, for the first time, be working in harmony to tackle fraud and reduce its impact on consumers.
Indeed, the ICNZ estimates that insurance fraud currently costs Kiwi insurers up to 10 per cent of gross written premiums annually – a total loss of NZ$614 million – though of course it’s not just insurers who pick up the tab, as these costs are transferred onto all parties in the chain, including policyholders.
As part of the IFB’s mission statement, it will aim to educate Kiwis about insurance fraud and its devastating impacts; provide a central hub for co-ordinating fraud-related issues; establish a centre of excellence where best practices can be discussed; research insurance trends on both a domestic and international level; cultivate relationships between agencies to facilitate more effective co-operation; and perform extensive analysis of insurance fraud data in order to spot trends and reduce incidents overall.
The IFB celebrated its launch with the release of a fraud whitepaper, which concludes: “It takes a concerted team effort to fight back against insurance fraudsters. No individual organisation or agency has the resources to single-handedly stop it. By combining resources and the expertise of insurers, law enforcement agencies, and the IFB, insurance fraud can be detected, deterred and prevented, thus helping to protect New Zealand policyholders.
“Creating an IFB in New Zealand will continue the global trend of pushing the anti-insurance fraud message that it is not acceptable behaviour and that those engaging in such fraudulent acts are more likely to get caught. The benefits to the industry are to lessen the financial impact of fraud with the additional benefits that those costs are not passed on to their policyholders.
“Finally, we should all try to stamp out fraud in the insurance industry, which will never be stopped by individual insurers alone. Only a collaborative approach will have any impact on this common and significant cause of industry leakage. Having an IFB is one way of combating insurance fraud.”
The bureau aims to reduce instances of insurance fraud by 10 per cent in its first year of operation.