Vehicle insurance fraud reaches more than P1 billion a year, a non-life insurance group said Tuesday.
The Philippine Insurers and Reinsurers Association said the industry was losing millions to motor car insurance fraud committed by individuals or organized groups. Pira said car insurance fraud had many forms, ranging from fake car theft, fake car crashes and fake car repairs.
“Fraud involves deception, betrayal and lies. It is often done in secret, by individuals, or by organized groups. It is an act that costs our industry at least a billion pesos in motor car insurance losses alone every year by our conservative estimate,” Pira chairman on technical committee on motor car insurance Arturo Reyes said during the first car insurance summit in Pasay City.
Reyes said while a study about car insurance fraud remained to be conducted, actual losses could be much higher than his “conservative” estimate.
“Pira has yet to conduct a study on the actual state of fraud in the Philippines. Yet, I am willing to bet my one-month’s salary that if such a study is done, the result will be much higher than our present guess estimates,” Reyes said.
Reyes said fraud accounted for more than 10 percent of the entire losses in motor car insurance.
“But this only accounts for those insurance companies paid for but did not know to be fraudulent. It still does not include those detected as fraudulent and were not paid. As you know, our laws do not recognize attempted fraud. Although we catch a lot, we could not do anything against these fraudsters,” he said.
Top insurance executives and experts in detection and prevention of car insurance attended the “Motor Car Summit: Fighting Insurance Fraud” in Pasay City.
Insurance deputy commissioner Vida Chiong said insurance fraud was victimizing both claimants and insurance providers. “Both insurer and policyholder bear the cost of fraud,” Chiong said.
She said the Insurance Commission was recognizing the growing problem of fraud and issued a circular ordering all companies to formulate anti-fraud plans.
It is a growing problem not only in the Philippines but all over the world, with losses amounting to more than P50 billion a year.
The Philippine National Police – Highway Patrol Group said in a presentation it recovered 74 vehicles involving insurance fraud from 2014 to 2016.
