Whether a burnt body, a nicked car, a stolen iPod, a king's ransom in jeweller or designer sunglasses, all are being eyed by the crafty.The life insurance industry has prevented some 21 000 fraudulent insurance claims over the past five years, according to the Cape Town-based Life Offices Association (LOA), an umbrella body for life assurance companies.
Had these claims not been identified and prevented, losses would have amounted to R1,3-billion, according to chief executive Gerhard Joubert.
The short-term insurance industry, on the other hand, received more than R22-billion in claims in 2006 and industry insiders fear a significant portion constituted fake claims.
So worried is the security industry about the rampant fraud that next week, it will launch the SA Insurance Crime Bureau (SAICB).
The bureau, it is hoped, will breathe new life into the fight against this type of crime once it starts operating on November 1.
Recently, KwaZulu-Natal has seen increasingly inventive insurance fraud scams aimed at defrauding insurance companies out of millions of rands.
These include:
* The sensational "resurrection" of a prominent Durban businessman who had allegedly led his relatives to believe he'd been burnt beyond recognition in his bakkie.
* A scam uncovered by police earlier this year in which the bodies of 21 "vulnerable" people, most of them hobos and prostitutes, were used to claim from life insurance.
Undetected
The SAICB believes the current approach to insurance fraud is fragmented and ineffective.
"Insurance fraud is a difficult thing," said Vivienne Pearson, image and reputation manager at the SA Insurance Association (SAIA), which has facilitated the formation of the SAICB.
"We know it is rife, but a lot of it remains undetected. If one imagines that 10 percent of those claims are fraudulent, we are talking about R2,2-billion that could have been used in a better way. We believe it's much higher than that, but we can't prove it," she said.
Many fraudulent claims were the work of organised criminals who enticed innocent people to get involved, with the prospect of making quick, easy money.
"They'll tell them where to leave the car so it can be 'stolen' or what to do to burn a house, hide its contents and claim from insurance," Pearson said.
High on the list of fraudulent short-term insurance claims, said Pearson, were those for expensive items such as cars, cellphones, big screen plasma television sets, jewellery and laptop computers.
One of the most common examples of insurance fraud involves an insured person staging a house burglary, hiding the goods, and then reporting them stolen, says Bradley Du Chenne, spokesperson for Dial Direct.
When a house robbery does, in fact, take place, the insured will often inflate the loss or claim for goods they did not own.
But claims for fake car thefts were just as rife, he said.
"Only once the car is safely out of the country, or its identity is sufficiently disguised, the insured submits a claim for a stolen car," said Du Chenne.
In such cases, the insured would benefit from a double whammy.
"(They) get a payout from the insurance company as well as the money they received for selling the car."
But it doesn't always work.
According to senior Durban prosecutor Blackie Swart, two local men were recently tried in court after making an insurance claim of R46 000.
This was for a BMW sedan that was reported stolen from the parking lot of a Durban casino when, in fact, CCTV footage subsequently revealed it was driven out of the casino by a person known to the owner.
Thief
The police traced the owner of the bakkie that had dropped off the "thief" at the casino. After questioning, the owner admitted that he had handed the car keys to the so-called thief, said Swart.
In the past, insurance companies had acceded to fraudsters using fake information to make multiple claims on one item.
"Money is tighter these days and people get up to all sorts of shenanigans. And insurance fraud is one of the easier ones," said Swart.
In an effort to curb this, most insurance companies now had their own investigators, Swart added.
Johan Burger, of the Institute for Security Studies, believes that a marked increase in commercial crime may be linked to the jump in insurance fraud.
The latest police statistics show that commercial crime rose from 53 941 reported incidents in 2004/5 to 65 286 in 2007/8.
"Commercial crime, under which insurance fraud falls, has increased sharply. But it goes unnoticed by many people. The focus is on armed robbery because it is something that touches on people's feelings," said Burger.
But some are confident that significant gains are being made in the fight against insurance fraud.
In the life assurance sector, the work of highly organised syndicates had prompted the industry to do more to detect and prevent fraud, said Johann van Rensburg, head of forensic risk at Metropolitan Holdings.
Meanwhile, the modus operandi employed by the gang involved in the mass insurance fraud killings first emerged in the media in July.
This followed an anonymous tip-off to police.
The syndicate, whose three members are awaiting trial in prison, would take life insurance policies at random. Once the victims were identified, they would then be killed.
They acted in collusion with Home Affairs officials who issued death certificates in these names.
Matching identity documents would be placed on the corpse, ostensibly solving the identity puzzle. And then the claims would be made.
Police spokesperson Superintendent Jay Naicker said this week that investigations into this case were continuing.
http://www.iol.co.za/index.php?set_id=1&click_id=15&art_id=vn20081026090447926C525813
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