Insurance firms to fight false claims

Two insurance companies have taken steps to clamp down on fraudulent claims, which the sector believes cost at least €65 million last year.

A former senior officer with the Garda Bureau of Fraud Investigation has joined Axa Ireland, the motor and home insurance company.

And Hibernian yesterday advertised for fraud analysts or investigators to head a new office that will oversee the investigation of fraudulent and exaggerated claims.

Fraudulent and exaggerated claims are estimated to add 2 per cent to the cost of the average insurance premium, or a total of €65 million in 2001, according to the Insurance Federation of Ireland (IFI). "And that is a conservative estimate," said a spokesman.

The IFI is lobbying the Government to introduce a special crime of fraud against an insurance company in its autumn sittings and intends to run a major awareness campaign on the issue in the near future.

A source in one company said the fraudulent claims scenario was getting out of control.

Mr Willie McGee, a former superintendent with the Garda Bureau of Fraud Investigation, has been appointed fraud investigations manager with Axa and will concentrate on the prevention, detection and investigation of fraud.

Mr McGee was well known as a senior member of the fraud bureau and was involved in a number of high-profile investigations, including one into the disgraced former stockbroker, Tony Taylor, and an inquiry into an advance-fee scam run by a group of Nigerian "businessmen" who had offices in Baggot Street, Dublin. He served a summons on Mr Charles Haughey for obstructing the Moriarty Tribunal.

Among Mr McGee's new duties will be the assessment of the prospects for criminal or civil sanctions against persons who bring fraudulent claims against Axa.

Hibernian has said it is seeking one or more fraud investigators as part of a drive to reduce insurance costs for small businesses. The company intends to improve the co-ordination of its various fraud-detection activities.

"False claims and exaggerated claims are one of the main factors contributing to rising insurance costs in Ireland today," said Mr Gary Owens, managing director of Hibernian.

"The problem is that everyone ends up paying for this through increased premiums. Furthermore, there are no legal penalties for taking a false or exaggerated claim to court. Hibernian is trying to nip this problem in the bud by appointing our own in-house investigator who will catch these bogus claims before they ever reach the courts."

A Hibernian spokeswoman said the true size of insurance fraud was not known but the decision to set up a new position in the company was the result of urgings from customers, lawyers and doctors who have been affected by or are involved in processing such claims.

She said that in a recent case a man was paid €15,000 in a court settlement for injuries to his ankle after he tripped over a crate. Video footage seen in court showed him falling lightly over the crate, then phoning his solicitor on his mobile phone and, subsequently, phoning his doctor.

In another case, people were caught on video practising their slip on a toilet floor of a fast food outlet that they then tried to sue. The case was thrown out of court but the people involved were never charged with an offence.

A spokesman for the IFI said additional resources would be put into combating fraud to catch perpetrators and to dissuade others from trying to make false claims.