New mobile device launches prompt spike in insurance fraud

New mobile device releases are triggering spikes in insurance fraud, according to Dave Ashton, head of New Zealand’s Insurance Council’s Insurance Claims Register.

New mobile device releases are triggering spikes in insurance fraud, according to Dave Ashton, head of New Zealand’s Insurance Council’s Insurance Claims Register.

Whenever there is a high-profile mobile phone launch from the likes of Apple or Samsung, Ashton claims there is a surge in consumers claiming their phone has been lost, stolen or accidentally damaged.

Speaking at the council’s annual conference, Ashton said fraud is often the ‘elephant in the room’ for insurers unwilling to challenge their policyholders on the honesty of their claims.

Yet a change in public attitudes, prompted by a growing awareness that fraudulent claims push up premium costs for all policyholders, has led to an upsurge in anonymous tip-offs from disgruntled colleagues, family members and friends, Ashton said.

He said that while estimating the level of insurance fraud in New Zealand is difficult, internationally it is believed to be between 10-20% of gross written premiums, with one industry study warning fraud adds NZ$120 to the premium of each policyholder each year.

In New Zealand last year, gross written premiums reached NZ$5.2 billion, while the total value of claims paid out sat at NZ$2.4 billion.

Back in 2000, the country was the first in the world to introduce a unified register of insurance claims. Its system keeps data on 90% of the country’s policy applications and insurance claims.

Currently around 8,000 claims are flagged as potentially fraudulent, but it is the responsibility of insurers’ fraud teams to choose whether to investigate.