Fraud costing insurance firms hundreds of millions
By The Star
KUALA LUMPUR: Fingers have been chopped off, medical ailments exaggerated and even death faked – all for the purpose of fraudulent insurance claims.
The problem is widespread and insurance companies have lost hundred of millions of ringgit, forcing them to push up premium rates and pass on the cost to other consumers.
Records from the Federal police show that fraudulent claims have been increasing in the past few years, with Selangor, Kuala Lumpur and Johor having the highest number of cases.
Other developments:
> Insurance Services Malaysia Berhad (ISM) says about RM500mil in bogus insurance claims are detected each year.
> At least two insurance firms have folded as a result of high compensation claims compounded by fraud.
> Insurance firms fight back by setting up special fraud detection units.
