By: Luke Jones, Published on May 25, 2018 10:20 AM, Last Update on May 25, 2018 07:21 AM
Fraud is a major factor in high auto insurance premiums, especially in Ontario where it contributes to the most expensive auto market in the country. While government and insurance companies are attempting to tackle the problem, Aviva Canada says more can be done.
The nation’s second largest property and casualty insurance provider has been one of the leaders in combatting fraud, but one senior claims representative says the industry as a whole must do more.
“It’s easy to come down on every little auto repair facility, or some of these [other] industries, it’s really the insurance industry that has left it [auto fraud] unchecked,” Gordon Rasbach, Aviva Canada’s vice president of legal and fraud management, said at the Canadian Insurance Financial Forum (CIFF), hosted by MSA Research. “And every year, not purposefully, but by default, [the P&C industry] has turned it into a cost of doing business.”
Rasbach concedes fraud in the auto insurance market is complex and criminals are often good at covering their tracks. He also admits combatting the issue is complicated due to the number of actors involved, such as insurers, law enforcement, government, the collision repair industry, the health sector, and regulatory bodies. He suggests collaboration between all areas is needed to effectively stop insurance fraud.
Still, Rasbach believes the P&C industry can get off to a good start by doing more on its own terms to prevent fraud.
“The problem is, there is no data on the extent of fraud—that is the issue,” he said. “Everybody knows it’s there. Everybody says it’s bad, but nobody has ever done a quantifiable study into it.
“Everybody reasonably accepts that there is a high level of fraud, but I’ll bet you that I would not need all of my fingers and toes to count the amount of criminal complaints made by insurers on all of the automobile fraud in the last 12 months. It just doesn’t happen. There has been a complacency, for a lack of a better word, by the industry, and [fraud] has become completely embedded.”