Home / Local / New NZ fraud bureau warns costs will rise without action
9 September 2019
New Zealand’s Insurance Fraud Bureau (IFB) has warned crime costs will continue rising without a concerted and co-ordinated approach.
A white paper released with the bureau’s launch last week estimates fraud costs the industry up to $NZ614 million ($575 million) a year, while international estimates put gross written premium impacts at 7-15%.
“This estimate will keep rising, as technology evolves and criminals get more dynamic and sophisticated, unless a concerted industry effort is made to counter it,” the paper says.
The bureau, established by the Insurance Council of New Zealand (ICNZ), is headed by Yvonne Wynyard and will provide a central point of contact for tackling fraud.
“The initiative has been in the works for a couple of years now,” Ms Wynyard told insuranceNEWS.com.au. “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.”
The bureau’s role includes taking a lead on education, developing multi-agency relationships and offering an industry-wide approach.
The paper notes insurance crime is often perceived as “victimless”, but it raises costs, increases premiums and can have wider impacts.
“Everyone pays for the costs associated with the deployment of public resources, such as police, fire and ambulance services, detection processes and prosecution services,” the white paper says.
“An additional by-product of insurance fraud is that it can put lives at risk. An example of this is arson.”
ICNZ has already developed an insurance claims register and has an online and phone tip-off 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.