The amount of fraudulent insurance claims in South Korea came to 798.20 billion won (US$685.44 million) last year, increasing more than threefold over the past 10 years. However, some point out that the nation’s insurance fraud prevention measures still go round in circles due to insufficient standardization in insurance claim information and lack of social awareness of insurance frauds.
The amount of fraudulent insurance claims surged from 254.90 billion won (US$218.89 million) in 2008 to 798.20 billion won (US$685.44 million) in 2018, according to financial regulators and insurance industry sources on May 2. The annual average growth rate over the period reaches nearly 13 percent. Non-life insurance fraud accounted for 90.7 percent of the total, standing at 723.80 billion won (US$621.55 million), with the remainder being life insurance fraud worth 74.40 billion won (US$63.89 million). Insurance fraud becomes more organized and advanced and does not go away.
Experts say that the government needs to improve the accessibility and utilization of insurance claim information, improve professionalism of insurance fraud investigators and actively raise awareness of insurance fraud in order to effectively prevent insurance fraud.
It is essential that the government help insurance companies have better access to information related to insurance claims, standardize claim information and insurance fraud related data and improve the information quality.
In addition, it must standardize the data format among insurance firms, regulators, investigators and related agencies and require them to enter accurate information in order to help them share quality information in the stage of insurance fraud detection and investigation.
Byun Hae-won, an analyst from the Korea Insurance Research Institute (KIRI), said, “The government needs to draw up measures to help insurance companies check whether or not car accident victims are habitual fraudulent insurance scammers through the insurance claims pooling system (ICPS).”
She added, “Considering the fact that there are fraudulent insurance claims not detected because of the unique characteristics of insurance fraud, the actual amount of fraudulent insurance claims will be higher. Effective systems to prevent insurance fraud are needed.”