Malaysia’s insurance sector will benefit when the Fraud Intelligence Systems (FIS) becomes fully operational in August next year to counter individuals or groups seeking to abuse the insurance system, said one official.
According to Insurance Services Malaysia Bhd (ISM) chairman Kong Shu Yin, the system, which is a collaborative effort by various industry players, will be implemented in phases, beginning with motor insurance before expanding to other insurance segments, reported
The Sun Daily.
The FIS, which is jointly developed by ISM and BAE Systems, enables insurance and takaful companies to detect fraudulent claims through advances in technology and data science.
“By pooling together industry data, FIS takes a data-driven scientific approach to fraud detection,” Kong told reporters at a press conference during the Malaysian Insurance Summit 2017.
He added that global figures indicated that around 10% of all insurance claims are fraud-tainted, and that
Malaysia registered MYR5.8 million in motor insurance claims in 2016. These fraudulent claims negatively affect the industry, as well as all consumers by driving up costs.
Meanwhile, Bank Negara
Malaysia governor Tan Sri Muhammad Ibrahim praised the FIS, saying it was a step in the right direction.
“By deploying the latest data analytics and network analysis, the FIS is a significant milestone in the industry's effort to combat fraud, but its success and benefit would depend on achieving the widest possible network effects,” Muhammad said during the FIS launch at the Malaysian Insurance Summit 2017.
He also warned insurance companies that non-participation in the program could reflect negatively on them.
“We expect all insurers to support these arrangements, and those who refuse to participate in this scheme will be looked upon unfavourably. We will also take note of their failure to participate in a common good.”
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