Zim rises up to curb insurance fraud… As investigations bureau now operational
By Wellington Zimbowa
THE Zimbabwe Insurance Crimes Bureau [ZICB] is now operational and set for launch anytime soon, to tame the haunting surge of insurance fraud, the Insurance Council of Zimbabwe (ICZ) has revealed.
ICZ’s marketing and public relations manager, Ringisayi Batisa said already the arm has developed systems to deter and measure the economic impact of insurance fraud on the national economy in an exclusive email interview this week.
“It is now operational. The Bureau has provided the short-term insurance sector with a tool that will provide a means to measure the impact of fraud on our economy. The bureau shall be launched in due course,” she responded.
Insurance fraud refers to deception for financial gain by parties such as agents, corporates, and policyholders on an insurance contract and in this case, policyholders.
Its worrying rise, with official estimations at 20 percent according to regulator Insurance and Pension Commission (IPEC) has triggered the creation of a dedicated office to deter the white-collar crime vice.
Time is nigh now for unscrupulous policyholders who have been bleeding the insurance sector that is already bleeding from low consumer confidence due to the hyperinflationary environment that wiped away huge investments – forcing some players’ turn renegade on their contractual promises, thereby, short-changing clients.
The ICZ spokesperson said the bureau is creating a central insurance database for timeous detection, investigations, and prevention of “organised and opportunistic, and insurance fraud and crime.”
She added, “… to achieve prosecution and conviction of offenders and recover lost value through working with law enforcement and anti-corruption agencies in Zimbabwe to eradicate insurance fraud and crime.”
Currently, the country lacks official statistics of a database for insurance fraud industry statistics and reports; hence, ZICB is already seized with correcting the situation, according to Batisa.
Common insurance fraud is in short-term contracts such as Homeowner’s property, Household, Vehicle Insurance, and Personal Liability Insurance.
“Fraudulent short-term insurance claims result from deliberate and opportunistic activities to obtain financial or economic gain at the expense of insurers. This includes planned and totally fabricated claims or exaggerated claim amounts,” she added.
According to ICZ, there are organised crimes by syndicates or corporates who steal large sums of money through business claims, while there is also connivance between policyholders, insurance staff, and corrupt law officers or authorities.
Insurance sector staff has seen also pointed in inflating service costs or charging for services not rendered while policyholders who want to cover their deductibles on claims or view filing a claim as an opportunity to make extra money.
However, Batisa said globally insurers handle fraud cases internally to manage reputational risks with Zimbabwe being no exception adding that global fraud estimations in the sector are 30 percent.
According to ICZ, significant claims under fire insurance tend to originate from arson with suspicions that failing corporates are more susceptible to insurance crime and fraud.
At a recent media mentoring virtual training co-organized by IPEC and the National Social Security Services Agency (NSSA), IPEC boss Grace Muradzikwa bemoaned the rising fraud rot in the insurance sector, calling on the industry to up their game against the ill vice.
The ZICB is set to enhance detection and successful prosecution of culprits.