Concerned over the rising cases of fraudulent claims, the general insurance industry is working together on a common registry of repeat offenders that can be accessed by all insurers.
They are working on a credit bureau kind of registry to identify fraudsters who routinely make claims with fake policies or seek exaggerated claims. By industry estimates, such frauds account for as much as 10 per cent of all claims.
“This is being done at the level of the General Insurance Council, where all general insurers are trying to come together and make a common list. It can be updated and accessed by any insurer at any time,” said an executive with a general insurer, adding that the idea is to adopt an aggregated approach towards fraudsters through the GI Council.
“While the plan is still at an incipient stage, the objective is to eventually scale it up into something like a credit bureau which will have the records of all policyholders and can be accessed at an industry level,” said the executive.
The Insurance Information Bureau will be used to cull data and carry out analytics.
Apart from fake claims, insurers say there are a high number of ‘exaggerated’ claims, especially in motor and health insurance.
“There have been cases of persons repeatedly taking out policies and filing claims with multiple insurers,” said another insurer, adding that there have also been cases wherein hospitals or motor service stations have overcharged.
In such cases, at present, the insurer informs the GI Council, which alerts other insurers.
“Fraud is inherent in the business. But if you, as an insurer, are lenient on claims or frauds, it will in turn raise the cost for (honest) policyholders. It is the fiduciary responsibility of insurers to run the schemes well and prevent fraud,” noted the first executive, adding that such vigilance could bring down product prices in the long term.