Insurers told to be vigilant in the wake of surging fraud cases

________________

The Insurance Regulatory Authority has urged insurers to be more deliberate in the fight against the growing trends of fraudulent claims that are distracting the insurance industry.

While speaking on the sidelines of the 67th CEO’s breakfast meeting at Kampala Serena Hotel, IRA CEO, Alhaji Kaddunabbi Ibrahim Lubega, said that while fraudsters are smart, insurers must beat them at their game.

“Fraud is real, and we must jointly devise strategies to curb it before it infiltrates the industry. Fraud is digital, and we must know how to tackle it. Fraudsters will continue to operate, but we must be ahead of them, and if we can’t, we must make sure whatever they create, we close it,” Kaddunabbi said.

Kaddunabbi disclosed that studies on fraud have shown an increase in fraudulent claims, noting that while some are detected before payment, others are only identified after payment.

“We have to treat fraud as a real threat to the growth of the insurance industry. IRA is rallying all the different sector players to take the lead, adopt technology and close all the potential loopholes being exploited,” he added.

The Insurance Regulatory Authority CEO also encouraged underwriters to maintain a fraud register and will allow for the blacklisting and shaming of those caught.

“Sharing information about individuals or entities involved in fraudulent claims helps track their actions across all insurance companies. While fraudulent claims have risen, genuine claims have also increased, so it is important to note that not all paid claims are fraudulent.”

The chairperson of the Uganda Association of Engineering Valuers and Loss Assessors, Geoffrey Ssewakiryanga, said fraud in terms of claims takes various forms, which have been changing in the past few years.

“The fraudsters fake accidents by bringing cars involved in past accidents, putting them near each other and taking photos, forging documents to make nonexistent claims.

One with a genuine claim can ask for sh50m. Some fake injuries to make claims while others work with officials in the insurance companies to sign off these fraudulent claims,” Ssewakiryanga said.

He explained that while insurance companies are increasingly using technology to reach clients, the fraudsters have also become smarter. Some use Artificial Intelligence to forge signatures and make claims.

For now, IRA says loss assessors are trained in technologies that detect fraudulent claims and improve underwriting at the initial stage. However, their presence should not delay claim settlement. If a claim is due, it must be paid promptly. 

We encourage loss assessors, underwriters, and all stakeholders in the insurance ecosystem to deploy digital interventions that reduce turnaround time for claim assessment and adjustments.