Speakers consider the challenges facing Insurers in South Africa
FINEOS Corporation, a global provider of innovative enterprise software solutions for insurance and bancassurance, in conjunction with its global partner, IBM, has concluded a briefing entitled “Tackling Insurance Fraud in South Africa”. The briefing, which took place in Johannesburg, was attended by representatives from the South African insurance industry. Sunjay Ramessuer, CIO of the Road Accident Fund (RAF) was also in attendance. Last year, following a world-wide extensive search and vendor evaluation, the RAF purchased the enterprise edition of FINEOS Claims. The new solution is being implemented to significantly improve claims outcomes, where bodily injury or death arises, for any third party from the use of motor vehicles within the borders of South Africa.
Fraud affects all segments of the insurance industry globally whether it’s soft fraud, where a claimant exaggerates their claim to any excess or deductible, or hard fraud from collusion by providers and accident victims. Though not peculiar to South Africa, the figures are nevertheless significant:
- Fraudulent claims are costing the short term insurance industry R3 billion per annum
- Short term insurance fraud is around 15% of premium
- Long term insurance detected fraud amounts to more than R100 million per annum
The audience was addressed by Michael Jansen, Partner, Financial Services, IBM Global Business Services, and Fergal Heffernan, Business Development Manager, FINEOS. The keynote speaker was Peter Goss, who is partner at Pricewaterhouse Coopers in South Africa and responsible for Corporate Fraud and Governance. Mr Goss looked at fraud risk assessment and the implications for insurers of fraud and misconduct from the perspective of:
- Reputational Risk
- Operational Risk
- Legal/Compliance Risk
- Financial and Non-Financial Reporting
Although the challenge facing the insurance industry is serious, the good news is that technology can go a long way to help combat fraud and enhance overall claims performance.
According to Michael Kelly, CEO FINEOS, “As we face into difficult economic times, insurers everywhere are experiencing and anticipating increases in fraudulent claims. FINEOS delivers leading-edge specialist fraud detection tools to help identify, manage and combat fraudulent activity. We believe there are huge savings to be made if insurers can get this right”.