Co-operation and data delivers returns for SAICB

May 2017 Editor's Choice, Security Services & Risk Management, Financial (Industry), Associations

Fraud is nothing new to most industries in South Africa and around the world. In the insurance industry, however, fraud ranges from individuals ‘trying their luck’ to sophisticated criminal syndicates focused on stealing as much as they can from insurance companies.

A common refrain among those who are criminally inclined is that this fraud is not really a crime because people are stealing from insurance companies, which have plenty of money. The reality, however, is that these companies make their money from premiums their customers pay, meaning the more fraud they suffer, the higher the premiums will climb in order to meet the needs of legitimate clients.

Garth De Klerk, CEO of the SAICB.
Garth De Klerk, CEO of the SAICB.

According to Garth De Klerk, CEO of the SAICB, the tough economic conditions in South Africa have resulted in a higher number of false claims over recent years as many people try to alleviate their financial predicaments by making fraudulent, low-value insurance claims for, among other things, lost cellphones, TVs, tyres and so on. These claims traditionally go unnoticed unless the claimant makes a mistake because they are common and for smaller amounts of money.

This is changing, however, as insurance companies increase their use of technology to validate claims (although the traditional human anti-fraud element is still in use). Today, technology is a must for these organisations as they strive to provide a better and faster service to customers. At the same time, technology is used to provide risk profile modelling, which is able to flag suspicious claims or claimants.

It’s not only individuals at work in committing fraud. Crime syndicates are just as active in designing fraudulent schemes for higher claim amounts. These schemes involve multiple people and sophisticated strategies to defraud insurance companies, especially in areas such as car, life and funeral coverage, although they are not limited to these areas.

Here again, the combination of technology and people, as well as co-operation between organisations within the industry and authorities makes an enormous difference in curbing fraud.

Intelligence gathering, analysis and sharing

The South African Insurance Crime Bureau (SAICB) was launched in 2008 after a four-year investigation by the South African Insurance Association (SAIA) on how to best address crime and fraud committed across companies in the short-term insurance industry. De Klerk explains that the organisation is a non-profit, non-commercial enterprise focused on fighting insurance crime across the industry.

There are currently 21 organisations that are members of the SAICB, mostly in the short-term insurance industry, but with other companies slowly realising the real benefits of membership.

De Klerk describes the organisation as a fusion centre in the middle of the insurance landscape where data is collected from its various members, analysed and the results shared with members and/or authorities which act against fraudsters. The organisation brings the industry and related parties, from SAPS to the Department of Home Affairs, the Hawks and the NPA together to discuss ways and means of eliminating fraud.

The SAICB does not only deal with information, however, it also has feet on the ground as it works with various authorities to address the fraud issue and go after perpetrators. De Klerk notes that the use of intelligence has had a remarkable impact on the fraud committed in member companies.

“Our members have seen an average return on investment (ROI) to the various companies of 230%,” he states. This makes a significant difference to the amount lost to fraud each year, and consequently to the bottom line.

Advice to individuals and companies

As noted above, insurance fraud affects everyone, the insurance companies as well as individual and business customers. It is therefore imperative that everyone plays their part in ensuring that legitimate clients receive good service and fast resolution to their claims.

Companies need to understand that fraud is real and does impact their bottom line, from paying higher premiums to longer resolution times. If corporate clients make the effort to ensure their activities are in accordance with their insurance policies and focus on preventing fraud, everyone wins in the long run.

De Klerk says individuals can also assist in helping themselves in this endeavour by not ignoring the fraud their insurers deal with on a daily basis. Being open, honest and transparent with your insurance company is key to stress-free dealings in this regard. Companies and individuals should not try to hide things from their insurers and must read and understand their policies. Even unintentional false claims cause problems for both sides and can result in delayed payments or unnecessary investigations.

Insurance companies are professional organisations that are run according to strict governance rules. Clients should treat them as such and also adhere to professional and ethical conduct in their own businesses, as well as any claims they have, thereby improving the industry and service levels for everyone – except the criminals.

For more information on the SAICB, go to www.saicb.co.za





Share this article:
Share via emailShare via LinkedInPrint this page



Further reading:

Boost revenue streams for MNOS
News & Events Security Services & Risk Management Financial (Industry)
ReveNet has introduced its new solution, designed to safeguard and potentially boost revenue streams in an increasingly challenging landscape for MNOS. The new platform combines advanced analytics and is built on trust, transparency, and sustainability principles.

Read more...
Here’s to a SMART 2025
SMART Security Solutions Editor's Choice News & Events
This is the final news brief from SMART Security Solutions for 2024, and the teams would like to take this opportunity to thank our readers, advertisers and partners and wish everyone a safe and secure festive season.

Read more...
NIS2 compliance amplifies skills shortages and resource strain
Information Security Security Services & Risk Management
A new Censuswide survey, commissioned by Veeam Software reveals the significant impact on businesses as they adapt to this key cybersecurity directive, with 95% of EMEA businesses siphoning other budgets to try and meet compliance deadline.

Read more...
SA company develops world-first safe K9 training for drug detection
Editor's Choice News & Events Security Services & Risk Management Government and Parastatal (Industry)
The Braveheart Bio-Dog Academy recently announced the results of its scientific research into training dogs to accurately detect drugs and explosives without harming either the dogs or their handlers.

Read more...
Understanding South Africa’s Cybercrimes Act
Information Security Security Services & Risk Management
The Cybercrimes Act No.19 of 2020 is a comprehensive legislative response to the evolving landscape of cyberthreats in South Africa. Its effectiveness, however, relies on enforcement, which relies on implementation, international cooperation, and collaboration between the public and private sectors.

Read more...
AI-powered automation for an operational efficiency edge
Editor's Choice AI & Data Analytics IoT & Automation
In the fast-moving world of digital transformation, businesses are under immense pressure to accelerate their operations and adapt quickly to stay competitive in an era dominated by AI and technological advancements.

Read more...
2025 Southern Africa OSPAs entries now open
Technews Publishing Editor's Choice News & Events Training & Education
Entries are now open for the 2025 Southern Africa Outstanding Security Performance Awards (OSPAs). The OSPAs are designed to be both independent and inclusive, providing an opportunity for outstanding performers, to be recognised and their success to be celebrated.

Read more...
Elvey to distribute Tiandy
Elvey Security Technologies Editor's Choice Surveillance News & Events
Tiandy’s presence in South Africa was boosted in November with the announcement that Elvey Security Technologies will distribute a broad range of Tiandy equipment through its channel partners and provide project assistance.

Read more...
Partnership addresses fire hazard mitigation
Brigit Fire (a Division of Hudaco Trading) Elvey Security Technologies Fire & Safety Security Services & Risk Management
Brigit Fire has partnered with the Elvey Group. The collaboration will see Brigit Fire distributing both the advanced C-TEC addressable fire detection systems (CAST Technology) and GreenMist lithium extinguishers.

Read more...
Fire protection for a solvent extraction plant in Africa
FS Systems Fire & Safety Security Services & Risk Management Mining (Industry)
A prominent mining site operates a state-of-the-art solvent extraction (SX) plant, integral to separating and purifying metals from ores, which pose significant fire risks, as SX processes involve highly flammable organic solvents and elevated operating temperatures.

Read more...