Insurance Fraud Surveys show 84% in Ireland believe insurance fraud is unethical, and 72% of Irish do not know how to report a suspected case of insurance fraud

KPMG Insurance Ireland survey findings:

• 86% of survey respondents believe people who commit insurance fraud are motivated to do so because ‘they believe they can get away with it’
• Less than 30% of respondents said they would report a case of fraud to the insurance company, and only 20% would be happy to assist the defence of a fraudulent claim in court

Allianz survey findings:

• Over 72% of Irish consumers in 2021 do not know how to report a suspected case of insurance fraud. 
• When it comes to a worry of being identified, over half (51%) of women and nearly half (49%) of those aged over 55 years surveyed are afraid of being identified if they report suspected fraudulent claims despite the existence of anonymous channels to report fraud

22 November 2021, Dublin:  To mark Insurance Ireland’s ninth annual Fraud Conference, KPMG and Insurance Ireland published a survey on insurance fraud, carried out by research agency Red C.

The survey shows that only 77 % of people in Ireland believe that it is unethical to overstate an insurance claim, with 84% believing that insurance fraud in general is unethical. Also concerning is that our research showed that 8% may omit information when making a claim to get a higher pay out while 21% were neutral on this issue.

Only 1 in 4 have made a claim on their own home or motor insurance policy, while less than 10% of respondents report making a claim against someone else’s policy.  Less than 1 in 10 respondents said they know someone personally who has committed insurance fraud.

The survey found that while attitudes towards insurance fraud are highly negative, most would be reluctant to report somebody for fraudulent activity – particularly family, colleagues, and friends. Only 20% of respondents said they would be happy to assist the defence of a fraudulent claim in court. The main reasons that were cited include fear of being identified, retribution from fraudster and perceived hassle. In fact, 98% of respondents stated that they have never previously reported a case of insurance fraud.

Allianz Insurance also conducted research with RedC and surveyed over 1,007 consumers in Ireland in October 2021 which showed that:

• Over 72% of Irish consumers in 2021 do not know how to report a suspected case of insurance fraud. 
• When it comes to a worry of being identified, over half (51%) of women and nearly half (49%) of those aged over 55 years surveyed are afraid of being identified if they report suspected fraudulent claims despite the existence of anonymous channels to report fraud
• When asked to rank fraudulent activities which they felt were the worst, 32% noted claiming a fake injury as being the worst. 37% saw setting up a policy under another person’s name without their knowledge as the most fraudulent.
• Over 2 in 5 of those who participated in the Allianz survey believed insurance fraud is built into the cost of insurance.

One third of respondents to the KPMG/Insurance Ireland survey believe that over 20% of claims are fraudulent. 86% of respondents believe that people who commit insurance fraud are motivated to do so because ‘they believe they can get away with it’. Almost half (46%) of respondents believe that any fraud should be reported to An Garda Síochána regardless of the amount, and 22% believed that there should be a minimum level of €1,000.

In terms of who should bear the brunt of tackling fraud, 75% believe the insurance sector itself should be responsible, compared with approximately half believing it should the responsibility of the legal sector, policy holders or Government and only 2 in 5 holding An Garda Síochána responsible.

Moyagh Murdock, Chief Executive, Insurance Ireland, said “We know that while most insurance claims made in Ireland are genuine, a minority of people make fraudulent and exaggerated claims, which costs Irish policyholders an estimated €200 million annually, so it is shocking to see from the KPMG survey results that there is still a substantial number of Irish people believing that it is ethically acceptable to commit insurance fraud.  It is also worrying to see from the Allianz survey that over 72% of consumers don’t know how to report a suspected case, and also that people are fearful of being identified for reporting fraud.

The perpetrators of fraud are wide-ranging, from criminal gangs who engage in fraud rings to the individual who exaggerates a claim on their policy to get more money from their insurance company, misrepresents claims or Policy data, or obtains cover through use of a ghost broker.  Our members are increasingly focused on fraud detection, and are keen to work closely with An Garda Siochana to tackle this issue.” 

“The industry must redouble its efforts to educate, encourage and protect those courageous enough to report suspected insurance fraud,” said Sean McGrath, CEO of Allianz Ireland. “We need to help change the attitudes towards making any false insurance claim as being a victimless crime. Fraudulent activity costs everyone in the long run and we must continue to educate people as to the consequences of committing insurance fraud and the effects it is having on Irish businesses and consumers nationwide. Allianz will continue to proactively tackle insurance fraud, which is in our customers’ best interest.”

Peadar Hogan, Forensic Director at KPMG said: “It is highly evident from our survey findings and from our conversations with our insurance clients that fraud is a key concern for insurers and consumers alike.  The fact that 86% of our survey respondents believe people who commit insurance fraud are motivated to do so because they believe they can get away with it demonstrates the need to highlight cases where fraud has been detected.  Our survey also shows that the public need to be educated on how to safely report suspected fraud.” 

The 2021 Insurance Ireland Fraud Conference, held virtually this year because of Covid19 restrictions, included a panel discussion on the Culture of Fraud in Ireland with experts including Michael Cryan, Detective Superintendent from the Garda National Economic Crime Bureau; Rosalind Carroll, CEO, PIAB; John Deane O’Keeffe, Criminologist and Lecturer; and Conor Kearney, Junior Counsel. Panellists discussed the need to raise awareness of the impact of fraud among the public, and to highlight how to report suspected instances of fraud to An Garda Siochana.  The panellists agreed that media coverage of court cases where insurance fraud has been exposed is helping to create greater awareness.   

The Insurance Ireland Fraud Conference took place on 17th November 2021, is now in its ninth year. The virtual conference was attended by approximately 500 executives from across the sector.