CTP insurance claims in Sydney are through the roof. In fact, claims on green slips in Sydney rose 39% this year, even though road casualties were lower. It’s a suspicious trend, as claims on all types of insurance were up 30%. Insurance fraud is estimated to cost the industry a staggering $2 billion a year.
The NSW government will now spend an extra $1.2 million on investigating and reducing CTP fraud. It already set up, in March, a green slip fraud taskforce with representatives from government, law, health and insurance.
David Hertzell, head of a British taskforce against insurance fraud, has offered some practical insights for managing fraud.
What is fraud?
Fraud takes many forms. For example, exaggerating claims, staging accidents, lying about a claim or deliberately giving misleading information to authorities, such as health professionals or lawyers.
Hertzell claims there are two main types of fraudsters – organised and opportunistic. Organised fraudsters are part of crime groups. Ppportunistic fraudsters are often just ordinary people who are feeling fed up.
“Sometimes they don’t trust big business, they’ve paid premiums for a long time and they feel society owes them something back,” Herzell says.
Perhaps QBE, IAG and Suncorp could start to share information with other insurers, as they do in Britain. Unfortunately, Australian privacy laws have inhibited this kind of activity. Insurance Fraud Bureau of Australia, an insurer-funded body, has already considered how to legally share data to help expose fraud.
The government hopes reducing the level of fraud in NSW will help to stem the continuing lift in green slip prices. Only 55% of the price of a green slip currently goes to funding somebody injured. The rest funds insurer profit and expenses, legal and medical fees and government expenses.
Remember, people who commit fraud are making green slips more expensive for everyone. Any person who suspects possible fraud can call the CTP Fraud Hotline on 1800 600 444.