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Insurers ‘tolerate fraud’ as they pass cost to customers


Alliance for Insurance Reform director Peter Boland

Alliance for Insurance Reform director Peter Boland

Alliance for Insurance Reform director Peter Boland

Insurance companies have been accused of not doing enough to tackle fraud.

They are prepared to tolerate it as they can pass on the cost to policyholders, the Alliance for Insurance Reform claimed.

The Alliance also accused the Government of failing to come down hard enough on the industry to force it to take fraudulent claims seriously.

Alliance director Peter Boland claimed most insurers settle fraudulent and exaggerated personal injury claims rather than going through the cost of challenging them.

“They then pass the cost of settling those claims on to policyholders,” he said.

Sinn Féin’s finance spokesman Pearse Doherty has claimed the industry is exaggerating the extent of fraudulent claims to justify charging high premiums.

Figures he obtained show just 48 instances of fraud were reported to gardaí by insurers last year, down from 63 in the previous year.

He said this means the incidents of insurance fraud reported to gardaí amounts to less than 0.5pc of third-party injury claims in motor insurance alone.

Mr Boland said 74pc of all personal injury claims are settled between insurers and solicitors and only a tiny fraction of these get to the steps of the courthouse.

“That way everyone gets paid and the policyholder foots the bill,” he said.

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He said the latest report from the Cabinet sub-committee on insurance reform, chaired by Tánaiste Leo Varadkar, has let the industry “off the hook with a commitment to have more meetings about fraud”.

“This is a slap in the face for policyholders and in sharp contrast to the work increasingly being done by An Garda Síochána on the issue of insurance fraud.”

The Personal Injuries Commission report had recommended insurers “step up their anti-fraud capacity through the recruitment of suitably trained personnel and the development of various technological means of combating fraud”.

But last week’s report to the Cabinet sub-committee says Insurance Ireland told the Government that “they run an annual training seminar, hold regular anti-fraud forums, and meet regularly with GNECB (Garda National Economic Crime Bureau) to ensure a co-ordinated approach to tackling suspected insurance fraud”. The Cabinet sub-committee marked this action as completed.

Mr Boland said this indicated the industry was combating fraud by having meetings.

Aviva regularly highlight that it has 40 fraud prevention/detection staff. But other large insurers in Ireland have fewer than three fraud staff, Mr Boland said.

He said one insurance industry insider told an Oireachtas Finance Committee meeting in 2016 that provided insurers can put a number on fraud and charge the punter, they are not incentivised to fix the problem.

Insurance Ireland insisted that fraud detection and prevention receive a high level of support from senior executives of member firms.

The spokeswoman said the measures Insurance Ireland has put into place to fight fraud include the anti-fraud forum and training events, anti-fraud advertising campaigns, an anti-fraud hotline and a protocol for the reporting of suspected fraudulent claims to gardaí.

A spokesperson for Mr Varadkar said the Government had enacted the Perjury and Related Offences Bill which introduces penalties for perjury-related offences.

It said there are plans for an Insurance Fraud Coordination Office under the Garda National Economic Crime Bureau.

These will act as “effective deterrents to assist in tackling fraudulent claims”.

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