A woman in Western Australia has been charged with deliberately setting her bakery on fire in what police allege was an attempt to secure an insurance payout worth $2.7 million.
According to 9News, the fire occurred on Oct. 12 at a bakery in Spender Park, Albany, around 2:10pm. Firefighters managed to extinguish the flames, but the building sustained substantial structural, roofing, and smoke damage. Authorities estimate the cost of repairs at $955,000.
Investigators allege the 50-year-old woman intentionally started the fire and filed an insurance claim shortly after.
The insurance policy reportedly included $500,000 for business contents and $2.2 million to cover revenue losses caused by business interruption.
The woman is scheduled to appear in court on Dec. 12.
The case highlights concerns about fraudulent insurance claims and their impact on premiums and industry operations.
Insurance fraud remains a growing challenge globally, according to the 2024 Global Claims Fraud Survey released by the Reinsurance Group of America (RGA).
The study found that 74% of life and health insurance professionals surveyed reported a steady or rising number of fraud cases in recent years.
The survey categorised fraud into three main types:
Survey respondents identified fraudulent claims as the most significant issue, affecting one in 30 claims. Fraud at the underwriting stage, such as misrepresentation of health conditions, is also a concern.
The study also highlighted delays caused by suspected fraudulent claims. While processing a standard claim typically takes three weeks, suspected fraud can extend timelines to over two months as investigators seek evidence from external sources like medical professionals or other parties.
Despite the prevalence of fraud, fewer than 60% of insurers report cases to law enforcement, citing barriers such as difficulty proving intent and concerns about reputational risks.
This year, the Insurance Council of Australia (ICA) launched a specialised unit to combat insurance fraud and scams, appointing Andrew Gill as its executive officer.
Gill brings extensive experience in fraud investigation, having served as a New South Wales Police detective and forensic director at McGrathNicol.
The new unit focuses on strengthening collaboration among insurers, sharing intelligence to detect organised fraud networks, and identifying emerging trends. The team also works closely with government agencies to enhance fraud prevention strategies.
