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CHALLENGES IN MOTOR … FRAUD, DRIVER CONTROL AND UNINSURANCE

CHALLENGES IN MOTOR … FRAUD, DRIVER CONTROL AND UNINSURANCE. Muzaffer Aktas 3 March 2013. Fraud, fraud, fraud. Systemic claimant fraud Occasional claimant fraud Disability fraud Solicitor fraud Police fraud Insurer employee fraud Whiplash fraud … … the problem has many forms.

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CHALLENGES IN MOTOR … FRAUD, DRIVER CONTROL AND UNINSURANCE

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  1. CHALLENGES IN MOTOR … FRAUD, DRIVER CONTROL AND UNINSURANCE Muzaffer Aktas 3 March 2013

  2. Fraud, fraud, fraud • Systemic claimant fraud • Occasional claimant fraud • Disability fraud • Solicitor fraud • Police fraud • Insurer employee fraud • Whiplash fraud … … the problem has many forms

  3. Systemic claimant fraud • Physical damage to the vehicle … • The written off car gets resold after repair • The damage is badly exaggerated • The same car is claimed against many insurers • And many more … • Personal injury can be created … • Mrs A hits Mr B for a whiplash loss, Mrs B then hits Mr A • One UK driver kept braking abruptly at the same roundabout to create a whiplash outcome – “real” accidents … only after 43rd “accident” did an employee in the office next to the roundabout notice & report the fraud

  4. Occasional claimant fraud • This is less of a problem as regards scale (it is the systemic approaches that are used by criminal gangs) • Nevertheless there is extensive levels of fraud where the person involved in an accident opportunistically sees the chance to make a fraudulent claim • Faking injury (especially whiplash)

  5. Disability fraud • Where the claimant suffers modest permanent disability, it is easy for the claimant to collude with the consulting doctor and pay an extra sum to ensure that the doctor certifies a high level of disability • The problem can happen even without a payment – the doctor may simply want to help a pleasant person or the doctor may dislike insurers

  6. Solicitor fraud • In Kenya there are many cases where the solicitor visits the hospital near the scene of a coach or bus disaster • All those injured in the coach accident have their names taken • So does anyone else being treated that day • Sometimes over 120 claimants have been claimed as riding on buses with maximum 38 seat capacity • Many “claimants” have no idea that money is being collected “for them” … the solicitor collects the claim cheque but is very slow to distribute the proceeds

  7. Police fraud • Regrettably there is scope for the police officer at the scene of an accident to accept money in exchange for making the accident report • Especially if the injured party was actually at fault, it suits that person to ensure that the police reports shows the other vehicle was at fault • Where bus or coach accidents are concerned, any encouragement to the police to help claimants is likely to be appreciated • Police can collude with drivers to avoid road tax, insurance etc

  8. Insurer employee fraud • It is all too easy for an insurer employee to collude with a repair shop to authorise more-expensive-than-needed repairs • A private relationship between the repair shop and the employee can “make it all worthwhile”

  9. Whiplash fraud • This has been mentioned … but the scale it can grow to is amazing • UK medical treatment costs for whiplash are about £8 million annually • UK insurer payments for TP motor whiplash claims are nearly £2 billion annually

  10. How to control fraud • Each market must create a Fraud unit • Success in many countries – see e.g. Turkey example • Checking of e.g. • Claims close to policy start dates • Claims occurring after midnight with no witnesses • Large value “hit and run” losses • Large value car “thefts” • Policies with high frequencies of claims (Jordan has an example with 83 claims in a single policy year) • Amend the law to exclude compensation for injury that cannot be proved objectively (e.g. no whiplash)

  11. Driver control • Related to fraud control is the need for driver control • Driving tests are often too easy to pass • Some countries permit many breaches of road laws before a driver’s licence is withdrawn • A points-based system works best with e.g. 4 speeding fines in 3 years being enough to trigger licence loss • Tough responses to drink-driving or drug-driving need to be in force • The penalty for being uninsured needs to be material

  12. Uninsurance • Major problem in some markets • Example – Vietnam, where over 20% of cars and over 70% of motorbikes are not insured. Bikes form 96% of the national vehicle count • Police are often reluctant to co-operate in controlling uninsurance (manpower issue) • Extreme deterrents can be applied – in the UK over 150,000 vehicles and bikes have been crushed, after due warning, due to having no valid insurance certificate • Must cost more to be uninsured than to buy the insurance

  13. BORIS’S WARNING TO UNINSURED DRIVERSS

  14. UNINSURED CARS CRUSHED

  15. DIVIDER SLIDE TITLE Subtitle 1 Subtitle 2 Subtitle 3

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