Commissioner of Insurance, Dr. Justice Ofori, says about 25% of all insurance claims made in the country are fraudulent . Non-life insurers in Ghana had an average daily claim of GHS 1.4 million, according to the National Insurance Commission’s (NIC) 2019 Annual Report.
Insurance fraud may fall into different categories, from individuals committing fraud against consumers to individuals committing fraud against insurance companies. Non-medical insurance fraud is estimated at over $40 billion dollars per year.
Globally, fraudulent insurance claims stand at about 40%, while the figure sits at around 25% in Ghana.
Insurance fraud, according to Commissioner of Insurance, Dr. Justice Ofori, not only incurs additional costs for insurance companies, but it also has a financial impact on ordinary consumers, as they are forced to pay higher premiums at the end of the day.
“Basically worldwide, of all claims reported, 40% are fraudulent. That is one of the reasons why insurance claims need a lot of investigation. It also affects the premium people pay, because so far as there are leakages it results in a high premium for consumers worldwide. I don’t have the specifics, but in Ghana, we should be looking at about 25% fraudulent claims. It could be inflating claims, staging claims, and sometimes people staging their death to make a life claim.”
According to Dr. Ofori Insurance companies in Ghana need to do better due diligence to ensure only legitimate claims are paid.
“It is the responsibility of insurance companies to do due diligence before embarking on any claims payment. Claims investigations are very important to actually weed out such fraudulent instances. So it is the responsibility of the insurance companies who have to pay these claims to investigate to ensure that they are paying only legitimate claims.”
People make fraudulent claims due to a poor database of policyholders and their activities, according to a recent study on public perception, awareness, and confidence in insurance in Ghana, a problem the NIC says it is working to resolve with an upcoming digital claims database.
source: citibusinessnews
