Insurance Fraud Costing South Africans Billions

April 29 - Jonathan Holden, the Executive of Operations at Lion of Africa Insurance, pointed to a growing problem in the country's insurance industry - that of fraudulent claims.

Holden said that while groups such as the Crime Bureau of South Africa are doing excellent work in eliminating illegal activities, criminals are still managing to do enough damage to cause premiums in in the industry to rise.

According to the latest report released by the Standard Bank, fraudulent claims account for 15% of premium costs in the short term insurance industry.

Translated into rands, this means that South African consumers are paying R3 billion every year to cover the costs of insurance fraud.

Holden called for greater cooperation between the industry and authorities to help battle this problem.

"With potential premium increases on the horizon, the industry at large needs to come together, share information and act fast in order to safeguard and protect consumers financially," said Holden.

He called for more companies to join the Crime Bureau of South Africa, which consists of ten member companies, including Lion of Africa, Santam, Outsurance, Mutual & Federal and ABSA.

The Bureau is proactive in making contact with the South African Police, the revenue service and justice system to investigate claims and reclaim property.

Recently, the Crime Bureau recovered 350 cars from police pounds in Kwazulu-Natal by cross referencing unclaimed cars with insurance records.