The 2018 fraudulent and dishonest claims statistics, released this week by the Association for Savings and Investment South Africa (Asisa), show that the total number of irregular claims was lower in 2018 than in 2017, but the claims value remained almost the same. In 2017, life insurers detected 5 026 fraudulent and dishonest claims worth R1.13bn.
Donovan Herman, convener of Asisa’s claims standing committee, says although life insurers are frequently accused by the public of trying to avoid paying claims, the numbers tell a different story. In 2018, life insurers paid 99.3 percent of claims made against fully underwritten individual life policies alone, to a value of R15.1bn.
Herman says there has been a significant decrease in misrepresentation and non-disclosure across all long-term insurance categories from 2017 to 2018. Misrepresentation occurs when a policyholder deliberately provides misleading information to a life insurer, while material non-disclosure refers to the failure of policyholders to disclose important information about a medical condition or lifestyle.
According to Herman, most of the fraudulent activity in 2018 took place in the funeral insurance space.