New Industry Crime Bureau Likened to FBI

May 26 - Speaking in an interview on Business and Insurance on Summit TV, Vivian Pearson, representing the South African Insurance Association, gave some more details about the new crime-busting initiative launched by the association to be known as the Industry Crime Bureau (ICB).

Pearson explained that the industry had come to the conclusion that the only way to effectively fight the growing instances of fraud was to form the ICB

When asked whether she had a figure for how much insurance fraud costs the industry per year, Pearson replied, "Internationally, figures are around 10% - 30% of insurance claims have an element of fraud. We believe that in South Africa it's similar. So if one looks at the amount that the short term industry for instance paid in claims in 2006, 10% of that would be R2 billion so we're talking about a lot of money."

Pearson said that representatives of the SAIB had visited the United Kingdom and Sweden to investigate how their own, similar bureaus worked. "What we're going to do is we're going to leverage existing data - the insurance companies do have a lot of data available. We are currently already sharing data - but we are going to go a step ahead of sharing data using technology that was actually already developed for the FBI to identify patterns of organized insurance crime, specifically insurance fraud."

Pearson said that the SAIB was particularly keen on picking up on elements of organized crime within the industry, and that she believed that the ICB would be able do the job. She said that until now, the industry had not had a system whereby it could be run through existing data to pick up frauds across the board, involving more than one company. The ICB would thus pick up irregular patterns and hopefully slash the high instances of fraud in the South African insurance industry.