In the battle against insurance fraud, a new weapon has been added to the armoury in Malaysia.
The Malaysian Insurance Institute (MII) has announced that the country’s insurance sector will be able to fully utilise the Fraud Intelligence System (FIS) by October to combat insurance fraud.
It is hoped the new fraud detection system will help insurers cut fraud cases by 30%.
According to MII chief executive Datuk Syed Moheeb Syed Kamarulzaman, the FIS is a new initiative to encourage wider collaboration across the industry and with other service providers.
The industry alliance behind FIS is led by ISM Insurance Services Malaysia.
“[Fraud] is like an iceberg – there are much more that we are not aware about,” Syed Moheeb told media at a press conference after the General Takaful Agents Convention. “Based on the normal statistics, fraud is likely to happen … five times [more] than what is reported by the insurance companies.”
Syed Moheeb said that a lot of money was spent to develop this system, but it still has a long way to go.
“Now the industry is building a risk scoring mechanism where all the claims are collected and merged with the big data which will give the scoring to the claim, based on various factors,” he said.
Suparno Ahmad, Hong Leong MSIG Takaful’s head of general takaful operations, explained more about FIS.
He said ISM’s objective is to use FIS to reduce insurance fraud by 30% by 2018.
“Right now it is the pilot run which involves five insurance companies while the remaining 22 companies will be going in by batches from time to time,” he told Edge Markets. “So the participation by the total industry is carried out in stages and the total participation is expected by the second quarter of next year.”
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