$140m of motor claims paid 'tainted'

An Orange Force specialist, whose job is to help the insurer's policyholders when accidents happen, at the scene of an accident.

SINGAPORE - About $140 million worth of incurred motor-insurance claims here last year were either inflated or fraudulent, revealed the

General Insurance Association of Singapore (GIA) yesterday. Such claims accounted for about 20 per cent of all incurred motor-insurance

claims last year. Such practices threaten to not only drive up the insurance premiums paid by all motorists, but also the fares paid by

public-transport commuters, GIA president Derek Teo said. During a media briefing to share the overall insurance industry's performance

last year, Mr Teo said: "The costs of inflated claims are borne by all. For example, if premiums are increased for taxi fleets, the taxi driver

will charge you more for your fare." On the whole, Singapore's domestic insurance industry grew 5.4 per cent last year to $3.34 billion in

total gross premiums. Underwriting profit, which refers to insurance companies' earned premiums after subtracting costs such as incurred

claims and management expenses, grew 16 per cent to $288.21 million. The annual report covered various forms of insurance, from fire to

health, but motor insurance notably posted one of the biggest increases in profits last year. After suffering losses in 2010, the motor-insurance

industry registered its second consecutive year of underwriting profit, of $50.36 million last year, up 135 per cent from 2011. Incurred claims

last year totalled $742 million. Mr Teo said there were various reasons for strong profits, including the introduction of the Motor Claims

Framework in June 2008, which requires motorists to report accidents within 24 hours. This gave insurers more time to assess the damage

to vehicles, as well as to investigate the circumstances of the accidents. The GIA is looking into measures such as specific legislation for

motor-insurance fraud, which would come with heavy penalties. GIA management-committee member Martin Bridger said: "We need to tell

the population, 'Don't do that - it's a crime, you could go to jail'. Secondly, everyone is paying for it because of higher premiums."

adrianl@sph.com.sg

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