War on motor claims bears fruit
THE war on fake motor-insurance claims appears to be paying off. Last year, insurers in this sector made their smallest payout in five years.
Things may get even better for them as they are lobbying for a specific law against insurance fraud to deter tricksters.
Last year, insurers in the sector paid $712.4 million in claims, $29.7 million less than the $742.1 million the previous year. This is the lowest payout in five years, said the General Insurance Association of Singapore (GIA) at its annual results briefing yesterday.
Reason? Measures to tackle inflated or fraudulent claims, such as its Motor Claims Framework, are taking effect.
Implemented in 2008, the scheme requires motorists to inform insurers of accidents within 24 hours and makes it mandatory for insurers to conduct pre-repair inspections.
Mr Derek Teo, executive director of GIA, said: "It's now more embraced by motorists. In the beginning, motorists were not so used to it so not many adhered to it."
He added: "Timely reporting gives insurers a better chance to investigate."
Inspections by third-party insurers before the repair works start also cut down the chances of cheating and inflated claims.
The association asked the Monetary Authority of Singapore last month for a law aimed specifically at insurance fraud.
Earlier this month, nine men were charged with cheating over an allegedly staged road accident, which saw them claim more than $83,000 in insurance.
Mr Teo said: "If people know that there is a fraud law staring at them in the face, they will think twice before making false claims."
Insurers are taking their own steps to smoke out cheats.
Mr Luiz Campos, chief executive of Liberty Insurance Singapore, said the company set up an investigation unit to look into fraud cases since 2010, and it has been "effective".
AXA Insurance Singapore set up an investigation unit last year. It has already uncovered some cases which have been handed over to the authorities.
NTUC Income has implemented several layers of checks and has its own "fraud indicator". One red flag would be those who make repeated or multiple claims to the company or other insurers.
In general, the motor-insurance sector saw a rise in profits last year, though the average premium collected for motor insurance dipped slightly.
The average motor premium collected last year was $1,250, down from $1,280 in 2012. GIA attributed the decrease to less registration of new cars and more insurers in the marketplace.
In total, the motor-insurance sector collected $1.22 billion in gross premiums last year, a 2 per cent drop from 2012.
On the whole, Singapore's domestic general insurance industry grew 4.5 per cent to $3.5 billion in total gross premiums last year.
GIA president A. K. Cher said this reflects a "stable and sustainable insurance market and growth that is in tandem with the growth of the economy".
Referring to the motor-insurance sector, the major line of business, he added: "We will continue to work with our various stakeholders to ensure that motor claims are effectively managed and premiums continue to stabilise."