Fraud & Corruption
What is Fraud?
Theft by Deception
"The dishonest obtaining of property by deception"
When an insured makes a claim knowing he or she has:
- suffered no loss,
- or only a lesser loss than that which is claimed, or
- has suffered a loss but seeks to improve or embellish the facts surrounding the claim, by some lie.
Who Commits Fraud?
- 10% of people are inherently honest
- 10% of people are inherently dishonest
- The 80% could go either way
Three Principal Types of Fraud
- Opportunistic Fraud
- Loss did not happen
- Genuine Loss overstated
- Genuine Loss excluded, but adapted to suit cover
- Property was never owned by insured
- Repeat Fraudsters
- Previous claims history with other insurers and been successful in having suspect claims paid
- Organised Fraudsters
- Perpetrated by well organised groups
- Catalyst for this fraud is "connections"
- Motivated by:
- Need and Greed (Lifestyle)
- Credit or Financial necessities
- Peer Pressure
- Easy money fraud
In many African, Asian and the sub-continent countries of India, Pakistan and Bangladesh, corruption is widespread, but it is the petty corruption that is most damaging because it is so pervasive. Vaguely worded laws give poorly paid civil servants vast discretion thus, the granting of a license or approval or the completion of required paperwork becomes a favour for which some favour in return is required.
The practice of paying government workers for their services is endemic in Thailand, the Philippines, China, Vietnam, and especially Indonesia, and the speed of service depends on the bribe offered.
