As Ireland’s recession forces most people to adjust to their changed circumstances, a growing trend in insurance fraud indicates that some are finding other ways to ‘supplement’ their lifestyles. With the country’s top bankers getting to keep their million euro bonus many may feel that they too are entitled to their piece of the action.
Although it is often assumed that people commit fraud for personal gain, the reality can be more complex. Maintaining personal reputation or the avoidance of loss can be strong motivators. As people lose their jobs, the pressure to commit fraud to maintain a lifestyle beyond their reduced means increases.
The Irish Insurance Federation (IIF), the representative body for insurance companies in Ireland, is continuing its effort against insurance fraud. Michael Horan, Non-Life Manager in the IIF believes “there is definitely an increase in claims in the recession”. The number of calls to Insurance Confidential, a hotline run by the IIF where people can anonymously report suspected cases of insurance fraud, had more than doubled in 2009. There were almost 700 new cases of suspected insurance fraud reported to the Insurance Confidential hotline in 2009 – up from approximately 300 in 2008. And as the recession continues, the risk of fraud will increase.
The insurance industry really began to focus on fraud prevention and detection about ten years ago. One of the main ways insurers work together in this respect is through Insurance Link, a database used to identify repeat claimants. Nick Starling of the ABI in the UK, adds: ’Whether claiming against a third party for bogus personal injury or on their own insurance, fraudsters are more likely than ever to get caught, leading to more expensive and harder-to-obtain insurance and credit and the possibility of a criminal record’ .
With the introduction of the most draconian budget in years, more people are likely to find themselves in precarious financial situations. It remains to be seen whether the steps currently being taken to tackle insurance fraud will be enough to deter people from seeing it as an easy way out.
Brought to you by AXA Car Insurance Ireland
Insurance Companies themselves are the biggest purveyors of fraud against innocent people in Ireland. For years anybody who has had to insure a motor vehicle or house has been ripped off. This rip-off has been in-part sponsored by the government.
Just as an example, I was told that I could not insure two cars on one insurance policy. I asked why and was given the reason that one company would not bear the risk of two cars driven by one person. I cannot drive two cars at once so the risk is not doubled. I then had to take out a second policy with a different company costing over 700 euro. That was in 2010. Now in 2011 I find out that it is possible to insure two cars on one policy.
The problem with the system in Ireland is that the insurance is attached to the driver where the driver is insured on a particular car from a specific time to another specific time. This model is flawed and allows Insurance companies to pluck prices out of the air based on age, gender, etc. etc.
Insurance should be attached to the car as a nominal fee. Either it is insured or it is not insured then. Easier to police. Less fraud by Insurance companies towards innocent people.
By the way, where is the equivalent representative body that represents the insured people against Insurance companies who refuse to pay out for legitimate cases?
Many thanks for your feedback on our blog post.
In response to the two cars on the one policy – we do not have the facility to insure two cars on the one policy. We do have it on other classes of business such as motorcycle. But unfortunately on our private car side we don’t have an insurance product or IT system that caters for multiple cars on a policy. We would have no issue providing two insurance policies to a customer who has two cars. If he/she is the only driver on each of the policies both policies would benefit from the no claims discount the customer holds (which could be up to 75% with AXA if you have a full no claims bonus). The policies would be more expensive that insuring only one vehicle as there is additional risk – such as theft risk, liability for when the car is parked, vandalism etc.
To answer your question on the ‘representative body that represents the insured’ – the Financial Services Ombudsman is a statutory officer who deals independently with unresolved complaints from consumers about their individual dealings with all financial service providers. It is a free service to the complainant.
When a Complainant (person making the complaint) contacts the Bureau he will be sent a Complaint Form to be signed and returned to the Bureau. This Complaint Form should be returned within 14 days to the Bureau. It should be accompanied with any letters or documents which the Complainant has sent and/or received from the Financial Services Provider (Provider).
I hope this response is useful and I will certainly share your comments internally here in AXA.
Pauric
AXA Ireland