General insurers seek help of auto manufacturers, service centres to curb frauds


To reduce the incidents of fraud in the motor and health insurance spaces, general insurance companies are now also taking special assistance from players in those particular segments. These include medical professionals, auto manufacturers and service centers.

Mukesh Kumar, Executive Director, HDFC ERGO General Insurance said that they do seek help from auto manufacturers and service centers to trace stolen vehicles.

“Post the vehicle servicing data is obtained from the manufactures, it is matched again with the stolen vehicle data,” he said.

At HDFC ERGO, they have a dedicated department called the ‘Risk & Loss Mitigation Unit’ that has been set up to mitigate any risks arising out of frauds.

Here, fraudulent claims in health and motor insurance are usually detected by automated fraud trigger systems which detect any suspicious cases dynamically on the run-time.

Companies are also monitoring districts in terms of the historical data on claims. Frauds include fake or exaggerated bills for medical surgeries, false claims filed for getting car/bike serviced at insurer’s cost and filing theft claims when vehicle has not been stolen to get claim amount.

Sharad Mathur, Head-Distribution, SBI General Insurance said that in case of motor insurance, insurers have started identifying districts across the country which have high fraudulent claims, historically.

He explained that the estimate is that industry frauds are in the region of about 10-15 percent of claims. Of this, a large chunk of frauds are in motor insurance, he added.

“Learnings from the past are being leveraged and insurers are making an attempt to come together to create a data centre of fraudsters and their methodology, which can operate similar to a credit bureau. A dedicated department called Risk & Loss Mitigation is being set up,” said Mathur.

In the area of health insurance, fraud-prone areas are being modelled and erring hospitals are also being issued warnings against issuing fake or exaggerated bills for medical procedures.

Sukhesh P. Bhave, DVP – Accident & Health Claims, SBI General said that as far as health insurance is concerned, insurance companies have started employing specialists for claim investigation and fraud control.

“There are various initiatives being planned at an industry level to combat such frauds, right from creating repository to sharing information on fraudulent claims,” he added.

While unheard of in the past, insurers like SBI General are also doing a retrospective claim analysis for predictive modelling which is also being used to identify fraud-prone areas, hospitals, and other agencies .

Additionally, Bhave said that insurance companies are also applying deterrents, either in the form of scrutinising policies at the entry level or using analytics, forensics, and technological tools like spot/hospitalization verifications on a real-time basis.

Penalties are also imposed on medical institutions that collude with fraudsters or individuals to file false medical insurance claims.

To ensure that the fraudsters are removed from the system, insurers are also filing police complaints and de-listing individuals or firms indulging in malpractices.

“Post the vehicle servicing, data is obtained from the manufactures is de-duped with the stolen vehicle data,” said Kumar.

The frauds repository has also been helpful. The exchange of fraud data is done with many companies and currently, is also being facilitated by the General Insurance Council. Kumar of HDFC ERGO said that fraudulent insurance claims are updated in the repository on a regular basis for policy cancellation and non-renewal.

He added that any insurance claim that is found to be fraudulent during the verification process is repudiated and the concerned policy is cancelled.