Morocco

Morocco:Insurers plan group action against fraudster

Source : Middle East Insurance Review, May 14, 2018

Several insurers are planning to take group legal action against an individual who filed 50 motor insurance claims in 18 months.

The action by the insurers will be the first in the insurance sector that intends to put up the necessary safeguards against fraudsters, and to control motor losses.

Wafa Insurance, RMA, Saham Insurance, Sanad, AXA, Atlanta, Allianz and MATU intend to file a collective complaint against the individual for fraud, reports Medias24 without naming the alleged culprit

The Moroccan Federation of Insurance and Reinsurance Companies (FMSAR) confirmed the plan and said that the complaint would be filed this week.

The culprit bought motor policies for the same vehicle from several insurers, and lodged claims against each of them.

Control

An industry source said that control is not optimal in the sector.

“When an individual wants to take out an insurance policy, the insurer does not check whether the vehicle is already insured by another,” he said. This is the same for compensation of claims.

In addition, quick compensation, even instantaneous at times, without checking that the damage has been repaired by the motorist, allows some fraudsters to more easily take advantage of the fluid claim process.

Insurance companies, worried about the increase in claims in the motor busines, decided to conduct a study to understand the reasons therefor. The announcement of the annual financial results was an opportunity for many of them to share this concern. The study showed that there was an average annual growth rate of 17% between 2006 and 2016.

The increase in the loss ratio can be explained by several factors, including density (the number of vehicles per sq km). While in 2006, the number of vehicles insured in Morocco did not exceed 1.5 million, at the end of 2016, more than 3.7 million vehicles were insured, even though there had not been a corresponding expansion in terms of roads and infrastructure, said Mr Mohamed Oudrhiri, general manager at Saham Assurance.

The FMSAR said, “20% of paid claims involved people who reported more than three accidents in a year. This shows that recidivists are significant.” In 2008, 9% of reported claims were caused by repeat offenders, while in 2016, this percentage increased to 21%.

Policyholders who report more than three claims per year are not necessarily fraudsters. But it is a behaviour that attracts the attention of insurance companies. By cross checking their data, the insurers were able to detect flagrant cases, including this particular case of 50 claims filed in 18 months by the same party. The case accumulated the highest number of claims reported in such a short time at all the insurance companies.

Anti-fraud measures

Several actions are being put in place by the FMSAR to prevent fraud.

Any insurance company will now have to check whether a partcular vehicle is already insured by another insurance company at the time of the application for insurance cover, This will put an end to the practice of overlapping insurance contracts.

Another measure requires an insurer or its agent to make sure that any repair or compensation has not been declared and settled at another insurance company before compensation is made.

The FMSAR will allow insurance companies to access the information on the database that already exists in the federation.

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