New Zealand’s insurance industry has launched a fraud-fighting bureau to prevent crimes estimated to cost insurers up to $NZ614 million ($576 million) a year.

The Insurance Fraud Bureau New Zealand (IFB) will provide a central point of contact, take a lead on education, develop multi-agency relationships and offer an industry-wide co-ordinated approach and greater scale in addressing the problem.

“We know that a small number of people are costing their fellow policyholders a significant amount each year through fraudulent claims,” IFB Manager Yvonne Wynyard told insuranceNEWS.com.au.

“We’re hoping that with greater focus on fraud education, and with more resources going to detection, rates of insurance fraud will reduce.”

The new bureau has been established by the Insurance Council of New Zealand (ICNZ) as technology evolves and criminals become more dynamic and sophisticated.

“The initiative has been in the works for a couple of years now,” Ms Wynyard said. “Similar bureaus in both Australia and the UK have proven successful and shown how much of a problem fraud is for their respective insurance sectors.”

In 2017 the Australian bureau, which was formed by the Insurance Council of Australia in 2010, assisted in detecting $280 million in fraudulent claims in all non-statutory insurance classes in 2017. An estimate of the value of undetected insurance fraud in the Australian market is not currently available.

Fraud costs for the New Zealand industry are not currently measured, but national and international estimates suggest gross written premium impacts of 7-15%.

“It takes a concerted team effort to fight back against insurance fraudsters,” an IFB white paper released at today’s launch says. “No individual organisation or agency has the resources to single-handedly stop it.”

The paper notes that insurance crime is often perceived as “victimless” but it affects costs and leads to increased premiums.

Fraud examples highlighted include claiming for a “lost” or “stolen” iPhone, then using funds to purchase the latest version, while a typical “soft” fraud involves adding items not stolen to a list of goods taken during a burglary.

ICNZ has already been active in tackling fraud after developing an Insurance Claims Register which allows members to share and view information and which can raise red flags.

But not all ICNZ members participate in the register, there are limitations to the fraud detection it offers and insurers don’t have developed avenues for collaborating with law enforcement agencies.

ICNZ also has an online and phone tipoff service, which will be taken over by the new bureau and given a higher profile.

“With an ability to report fraud incorporated into our broader educational and analytical focus, we believe there will be an increase in fraud reports,” Ms Wynyard said.

The white paper highlights the fact that offenders risk not only prosecution but cancellation of their policies and an inability to get cover in the future.

Ms Wynyard, who joined ICNZ last year, spent 22 years with the New Zealand Army as an intelligence practitioner, trainer and manager and was at the Accident Compensation Corporation for almost a decade.

The Insurance Fraud Bureau website can be viewed here.