Significant increase for fraud in life insurance

In 2014, South African life insurers recorded a strong increase in fraudulent claims files. Fraud cases have increased by 77% with 8306 cases recorded in 2014 against 4690 in 2013. Death and funerals insurance are the most affected by this phenomenon. These two insurance packages alone totaled 7360 false statements in 2014, three times higher than the number listed in 2013.

According to Peter Dempsey, deputy executive officer of the Association of Savings and Investment (Asisa), insurance fraud represents a shortfall of 755.2 million ZAR (53.10 million USD) for life insurers in 2014. Although the fraudulent practice is clearly increasing, losses generated by insurers are marginal compared to the total of claims paid during the mentioned year which amounted to 29.4 billion ZAR (2.53 billion USD), or 2.5%.

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