An Aviva Canada official says insurance companies should be mandated to report fraud to both law enforcement and other insurers. All types of fraudulent activity should be made common knowledge across the industry and government.
“The provincial regulators of insurers need to compel the insurers in their province to act on fraud and that includes the reporting of data on fraudulent activity for the industry’s benefit,” said Gordon Rasbach, vice president of fraud management at Aviva Canada, in an interview.
“Insurance companies are under no oblation to do anything about fraud,” Rasbach added, regarding the current system.
On Thursday, Aviva Canada published its Crash, Cash and Backlash: Aviva Fraud Report 2017, with results of a survey that found two in three participants “feel that cracking down on fraud would reduce their current auto insurance premiums.”
The company interviewed 1,502 Canadians through research company Pollara Strategic Insights in October. Aviva estimated the cost of auto insurance fraud alone costs up to $2 billion per year. This money could ultimately be used to reduce premiums if fraud was to be eliminated.
“Each [insurance carrier] decides on its own what it’s going to do about the fraud problem,” Rasbach told Canadian Underwriter. “So, the regulator needs to follow the models which are in many other countries, but do not exist here, where they need to regulate insurers to do something about fraud.”
More regulations would give the industry the ability to combat fraudsters. Aviva Canada’s survey shows 77% of respondents “are supportive of government agencies and law enforcement allocating more time and resources to policing and prosecuting Canadians who have submitted fraudulent claims.” The results are considered accurate within plus or minus 2.5 percentage points, 19 times out of 20.
The provincial governments should help more by providing resources to “the public investigation, the public prospection of these frauds when they become known,” Rasbach suggested. “Insurance companies out there investigate fraud. Quite often they will bring them to different public agencies and they are not always resourced appropriately.”