The chief executive officer of Allianz Malaysia, Zakri Khir has revealed that motor insurance claims fraud is rife in Malaysia, and that it costs insurers RM1 billion a year. This is out of the industry’s total motor claims of approximately RM10 billion.

To set the stage, Zakri explained that the fraud typically takes place at car accident sites, where the customer involved in an accident is approached by someone called a “callman” – who is essentially an independent tow truck tout. The callman will then go on to offer assistance, claiming to represent a specific authority or insurance company, but will in fact tow the damaged vehicle to his own workshop or peddle it out to a few workshops bidding for the vehicle. Either way, the callman is set to earn a profit from the repairs of the vehicle.

“There are many parties that monetise motor claims to their own benefit under a cloud of lack of clarity and mystery surrounding the whole motor claims process that most customers are not wise to it. This gets magnified when customers do not know their rights as consumers – that your insurer is there to serve your needs, not the other way round,” Zakri emphasised, adding that some workshops may also use sub-standard parts for the repair or take the opportunity to make more repairs than necessary, thereby driving up the amount of claim made.

As such, Zakri said that it is crucial for insurers to secure a car accident site as quickly as possible, before such callmen can swoop in to ensnare the customer. He also stated that numerous parties contribute to this ecosystem of fraud, with notable figures being the callmen, workshops, and authorities. Occasionally, even customers play a part in these false claims, he said.

Furthermore, Zakri said that the situation can sometimes be made murkier as the media, the Federation of Malaysian Consumers Associations (FOMCA), and politicians would paint the workshops as small establishments that are discriminated by big insurers.

In response to these frauds, Allianz has rolled out its Allianz Road Rangers (ARR) initiative, which deploys personnel to assist its affected customers, starting from the accident site until the lodging of a police report. Additionally, the insurer also recently revamped its panel of authorised repairers so that it consisted only of PIAM Approved Repairers Scheme (PARS) workshops.

“We knew we had to buck up to remove any element or opportunity for fraud and pay out genuine claims. Our customers must know that we will not partake nor condone any devious activity. The entire ARR journey from the accident assistance service to claims, vehicle repairs, and the selection of workshop repairers is our way of having a structured delivery of service that is visible to our customers,” said Zakri.

Finally, Zakri commented that the savings made from reducing such scams can eventually trickle down to customers in the form of lower motor insurance premiums. “If we are more efficient, we can save on this (fraud), and we can also bring down premiums because the cost of claims is a direct reflection of what we charge our customers,” he said.

(Source: Paul Tan’s Automotive News)

• TAGS:
• Allianz
• Allianz Malaysia
• Allianz Road Rangers
• Federation of Malaysian Consumers Associations
• FOMCA
• General Insurance Association of Malaysia (PIAM)
• Motor Insurance Claims
• Motor Insurance Claims Fraud
• PIAM
• PIAM Approved Repairers Scheme (PARS)
• Zakri Khir