Information availed to businessdigest this week shows that there is a high prevalence of insurance fraud ranging from lying on application stage to saving  money and stage-managing road traffic accidents.

INSURANCE fraud fighting Unit, Zimbabwe Insurance Crimes Bureau (ZICB) is closing in on fraudsters faking insurance claims to get huge payouts.

This comes as ZICB, which is made up 20 insurers and 10 reinsurance companies, says it has intercepted in excess of US$650 000 in fraudulent insurance claims since its inception.

According to the Insurance Council of Zimbabwe (ICZ), the local insurance industry is losing close to US$165 million annually through fraudulent activities in the sector.

Information availed to businessdigest this week shows that there is a high prevalence of insurance fraud ranging from lying on application stage to saving  money and stage-managing road traffic accidents.

Businessdigest understands that some fraudsters even go on to form formalised companies to defraud insurance companies.

ICZ acting chief executive Nicholas Sayi said in an interview this week the fraudsters would execute a coordinated set of events to syphon money out of insurance companies.

“However, we have since identified and broken some of these syndicates and we will continue to do so to reduce the prevalence to close to nil levels as our main reason of existence is to reduce the claims ratio (which is one of the primary indicators of prevalence),” Sayi said.

“In terms of prejudice, insurance fraud eventually affects the innocent insuring public, as insurance companies usually resort to increasing insurance premiums so as to stay afloat. These high premiums tend to deter policyholders hence expose the industry to more failure.”

He said the bureau was currently handling several cases in court.

“Collectively, the potential prejudice to the industry that was stopped by the Insurance Crimes Bureau amounts to US$650 000 in fraudulent claims since being fully operational,” Sayi said.

The bureau’s inception was done in 2019 but it was only officially launched in July this year.

On the other hand, Sayi said insurance fraud wiped out insurance pools rendering insurers unable to pay claims, and ultimately reducing public confidence in insurance fraud.

The world is currently facing one of the harshest economic climates experienced since the 2008 global financial crisis.

Sayi said more people will turn to insurance fraud to address the challenges they are experiencing.

He added that while the industry has faced numerous challenges over the years, the growth of fraudulent and criminal activities now posed a significant threat to the sector.

“Some syndicates create fraudulent claims through staged motor vehicle accidents. However, ZICB has an aggressive, hands-on approach to tackling this problem by gathering information, analysis, and investigation into the occurrences,” Sayi said.

“The Zimbabwe Insurance Crimes Bureau is investigating quite a number of insurance fraud cases but due to the confidential nature of our operations, we cannot share any information to that effect.”

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The Insurance Institute of Zimbabwe recently said the ZICB could be one of the solutions to fraudulent claims.

“Insurance fraud has become one of the challenges in the sector, but we believe the coming in of ZICB will help solve this mystery,” Sayi said.

“We believe that the unit is well capacitated to handle this trend, which is bleeding the industry. A huge chunk (around 30%) of the claims, which are settling are all fraudulent.

“ZICB comes in with a system where as insurers, we are now sharing data. By sharing data we are able to weed out these syndicates,” he said.

According to the Insurance and Pensions Commission, insurance fraud occurs when an insured or someone in relation to an insurance process, knowingly makes a falsified claim or misrepresents facts leading to the claim or process.

The most common types of insurance fraud in Zimbabwe include fictitious death claims, exaggerated claims amount, insuring terminally ill patients, fake accidents, and employee fraud.

The regulator, however, believes that while insurance fraud exists, the insurance industry should resist the temptation to delay the settlement of legitimate claims under the pretext of fraud investigations.

The Insurance Institute of Zimbabwe recently said the ZICB could be one of the solutions to fraudulent claims.

“Insurance fraud has become one of the challenges in the sector, but we believe the coming in of ZICB will help solve this mystery,” Sayi said.

“We believe that the unit is well capacitated to handle this trend, which is bleeding the industry. A huge chunk (around 30%) of the claims, which are settling are all fraudulent.

“ZICB comes in with a system where as insurers, we are now sharing data. By sharing data we are able to weed out these syndicates,” he said.

According to the Insurance and Pensions Commission, insurance fraud occurs when an insured or someone in relation to an insurance process, knowingly makes a falsified claim or misrepresents facts leading to the claim or process.

The most common types of insurance fraud in Zimbabwe include fictitious death claims, exaggerated claims amount, insuring terminally ill patients, fake accidents, and employee fraud.

The regulator, however, believes that while insurance fraud exists, the insurance industry should resist the temptation to delay the settlement of legitimate claims under the pretext of fraud investigations.

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