Gordon Rasbach, vice president of legal and fraud management for Aviva Canada has urged Canadian insures to follow the lead of other nations in the way auto insurance fraud is reported.
Rasbach had already told attendees of the Canadian Insurance Financial Forum (CIFF) that insurance companies must do more to prevent auto fraud. He added the P&C industry needs a fresh way of tackling insurance fraud. While Aviva Canada, the country’s second largest P&C has pushed ahead with new methods of preventing auto fraud, the industry as a whole is lagging behind.
He says mandatory reporting on all instances and investigations of fraud must be introduced in Canada. “It’s regulated in most countries this way,” he said. “It’s regulated in almost all 50 U.S. states this way.”
In Ontario alone, auto insurance fraud costs insurance customers $547 million, Rasbach estimates. This cost is pushed back onto consumers in the form of higher premiums and is a major reason why the province is the most expensive auto coverage market in Canada.
A recent Aviva Canada investigation found nine out of 10 cars are taken to a non-recommended collision repair location. This allows the potential for false invoices, which is why Aviva wants regulations to ensure consumers go to insurer recommended repairers. Rasbach says the industry can incentivise this shift by giving consumers discounts on their coverage for taking a vehicle to a preferred collision centre.
However, Gerry Martineau, director of The Co-operators national claims response unit believes consumers will react negatively to such a move. “Consumers want choice, so having an insurer dictate they must [take their car to a preferred centre], that rubs people the wrong way, so when I insist you go, as soon as I do that, that changes everything about the relationship.”