Motor Insurance Fraud

Overview

One in every five insurance claims made is fraudulent, according to the Insurance Regulatory Authority (IRA). Some fraud cases involve individuals who have taken loans to buy cars and fake accidents to get funds to pay the loans, to those who take private covers for public service vehicles. Motor assessors and garages also collude to commit fraud, with others, selling vehicles across the border and on the pretense that they have been stolen, worsening an already bad situation.

The Insurance Regulatory Authority (IRA) has urged Kenyans to desist from making fraudulent insurance claims as the practice was hurting the economy, keeping premiums high and slowing down claims settlement pace. The regulator has indicated that the malpractices that include false motor accident (injury) claims, stealing by agents, conspiracy to defraud and fraudulent motor theft claims are inflating insurance premiums in Kenya by up to 25 per cent. Players in the sector have been decrying huge losses associated with fake claims, especially in general insurance (motor insurance and medical insurance).

Purpose

This course is designed to equip the delegates with the knowledge to identify, investigate and combat motor insurance fraud.

Suitability

This training is suitable for:

• Underwriters
• Claims Professionals
• Sales Teams (Business Development)
• Agents and Brokers
• Loss Adjusters
• Risk Managers
• Assessors and Investigators

What is Covered

Day One

Introduction to Insurance Fraud

This course will provide the insurance professional with an overview to Insurance Fraud, including the effects of insurance fraud, the growing statistics of insurance fraud, examples and current fraud schemes as well as their consequences, the efforts to reduce insurance fraud and the role that you play to combat fraud. You will learn successful investigative techniques that can be used by you or the field investigators. We will provide you what outside field investigators can do, what they need to do, how to plan for the investigation and learn the types of investigations that can be conducted. This course also includes fraud reduction tactics and red flag indicators for insurance fraud.

Motor Insurance Fraud

This course will educate participants on what motor vehicle fraud is within the African market and Kenya in particular. They will learn the scams being perpetrated against the insurance companies and insureds. It will also provide them with the indicators of these types of fraud.

Insurance Fraud at Policy Purchase

After completing this module, participants will be able to explain how a high rate of fraudulent claims affects insurance companies and producers, identify steps producers and underwriters can take when policies are purchased to weed out buyers that are likely to commit insurance fraud and be able to describe the elements associated with the three types of hazards and explain why they are of concern to insurance professionals. It will also enable them identify specific policy provisions that may be grounds to void coverage or deny a claim when insurance fraud occurs, define contract fraud and premium fraud and provide examples of each, and identify fraud indicators associated with contract and premium fraud.

Insurance Fraud at the Time of a Claim

This course will provide the participants with the knowledge and skills to identify the parties in first and third-party claims, explain how misrepresentation or false swearing by an insured or claimant can be grounds to void a claim. They will also be able compare and contrast the characteristics of padded, exaggerated, and fake insurance claims; provide examples of ways insurance claims may be padded, exaggerated, or faked, describe circumstances under which a claim for an arson fire would be covered, identify the types of claim handlers, and describe the basic steps involved in claim handling, including the appropriate steps to take when fraud is suspected.

Day Two

Motor Vehicle Fraud - Auto Theft and the Investigation

With the economy dwindling, insurance fraud for auto theft has increased as people will either perform or have someone else burn, dump, or strip their automobile to get from underneath the monthly payment. Participants will learn what auto theft is, how to investigate it, the current trends in theft schemes, and examples of true theft claims. They will also be taught what investigation tools are available to them, and bring them up to speed on all of the anti-theft measures out there today. By laying a foundation of product understanding, participants will be prepared to recognize, combat, and even deter insurance fraud in these lines. They will be provided with real-world examples, terminology, red flags, and investigative techniques for front-end (premium and application) fraud, claimant/beneficiary fraud, and get-rich-quick schemes.

Body Shop & Repair Shop Fraud

This course will provide the participants with knowledge of how a body shop or repair shop defrauds the insured and insurance company from the onset of an automobile accident or comprehensive loss. It will also familiarize them with the types of scams that are common in luring the insured to a particular shop after a loss, as well as the scams performed on a vehicle prior to an adjuster's review and scams performed on the vehicle once the repair process begins It will also provide techniques to use against the shops committing the fraud and to provide information on how to prevent and deter shops from committing fraud.

Staged Automobile Accidents

The participants will be provided with the knowledge of staged automobile accidents, the common types of staged accidents, how they are performed and how to identify them. They will also be provided with Staged Accident indicators as well as the role of the claims professional will need to perform. They will obtain the process and knowledge of a staged accident field investigation. It will also enhance the understanding of the participants concerning the parameters of a field investigation and what relevant factors are being collected. The curriculum will explain how the claim is set up from policy inception to the date of the actual loss. This will enhance the participant’s knowledge of staged accidents which will facilitate in mitigating the claim.

Fraud Risk Management

An effective fraud risk management encompasses controls that have three objectives namely Detection, Prevention and Response. Participants will learn in detail about those objectives and their application in fighting insurance fraud.