GIA Singapore’s system detects fraud overlooked by insurers

The Fraud Management System uses data analytics and AI that analyse suspicious claims.

Singapore’s insurers have banded together with officials and law enforcement to combat the rising cases of insurance fraud in the Lion City.

Insurance fraud cases in Singapore had tripled to 71 in 2021, from only 20 in 2018, according to Andrew Yeo, CEO of Income and GIA Management Committee Member, and Insurance Fraud Committee Convenor.

One notable example is a Singaporean woman who fooled six insurers in 2020 by making 20 fraudulent travel claims worth over S$14k. The perpetrator used photos of damaged The perpetrator used photos of damaged goods, receipts, boarding passes, and even police reports she found online and digitally altered them to support her claims. She would have gotten away with it if not for the GIA’s FMS.Now the woman is serving five months in prison.

“With the reopening of the borders, we are observing an increase in suspicious travel insurance claims between January and July [in 2023] compared to the same period last year,” Yeo told Insurance Asia

Apart from travel insurance, Singapore’s motor insurance industry is also amongst the most vulnerable segments.

“Motor insurance fraud syndicates are known to operate through a network and recruit individuals to participate in the scam,” Yeo explained. A report by Crawford said at least 20% of all motor claims are fraudulent with claimants exaggerating their injuries and/or inflating the damage to their vehicle. Most of these cases are made by organised crime syndicates which stage traffic accidents and recruit hundreds of people as part of their activities.

“To date, over 300 subsequent motor insurance claims have been investigated by insurers with 13 confirmed as fraudulent cases which have now been turned over to the police,” Yeo revealed.

General insurance’s first line of defence GIA has collaborated with the police, insurers, and the Commercial Affairs Department to combat fraud using FMS.

First launched in 2017, the FMS uses data analytics and AI to detect potentially fraudulent claims at scale.

“When a suspicious claim is detected through the FMS, insurers involved will be contacted to verify the suspicious claim. If sufficient evidence reveals that there is fraud, a police report will be filed and the insurers involved will then need to cooperate with the police,” Yeo explained.

Yeo stressed the importance of the FMS as most of these cases would have gone unnoticed if it was just done through a manual review and even embolden fraudsters to continue with these schemes.

Other ways

Aside from the FMS, the GIA also collaborates with specialist investigators from the Commercial Affairs Department and insurance representatives through the GIA Insurance Fraud Committee (IFC). The GIA is also working closely with the Singapore police’s specialised fraud

Insurers provide claims insights which are then shared with the police and fed into GIA’s FMS investigation branch, which is also part of the IFC. These agencies share information and best practices in detecting and preventing insurance fraud.

“For example, should the police receive reports on a new variant of insurance fraud, they will inform us and we will review our safeguards and conduct more stringent checks to verify the authenticity of the claims,” Yeo said.

This collaboration goes both ways as the GIA also exchanges information with the police on the possible characteristics of fraudulent insurance claims.

"Insurers play a pivotal role as they provide claims insights such as the latest trends and common forms of insurance fraud that they observe, which are then shared with the police and also fed into GIA’s FMS for further refinement of its detection capabilities," Yeo added.

The GIA is also tapping the public to help them identify insurance fraud. Under the GIA Insurance Fraud Tip-off (GIFT), a person who reports fraudulent activities can get a reward of up to $10k leading to successful prosecution and conviction of general insurance fraud cases concerning members of the GIA.

Insurers’ role

“Insurers are able to provide insights such as the latest trend and common forms of insurance fraud that they observe. This feedback will help refine the FMS system further,” Yeo said. GIA believes that it is important to impose a high standard of conduct amongst insurers and their employees. To read the full story, go to https://insuranceasia.com/