Motorists lose P700M to insurance fraud


MOTOR vehicle owners and insurance companies have lost last year an estimated P700 million to fraudsters who make false claims using staged accidents, fake carnapping, and tampered registration papers

That is 10 percent of the P7 billion car insurance claims last year.

Disclosing these figures at the country’s recently held first motorcar insurance summit, Ramon Dimacali, the president of FPG Insurance, a leading non-life insurer, said that the biggest losers are motorists who have to pay higher insurance rates because rates are computed based on the ratio between insurance premiums and losses.

Dimacali’s revelation has indeed surprised the new Land Transportation Office (LTO) chief Edgar Galvante. He said: “Before I thought it was the insurance companies that are fraudulent. Then I find out that insurance companies are also victims.” And he has promised to work with the insurance sector to weed out fraudsters.

The LTO, said Galvante, would ban its employees from selling insurance or recommending certain insurance companies to motorists coming to the agency for registering their vehicles.

“It is not the LTO’s job to sell insurance or even regulate insurance companies,” he said.
“The Insurance Commission,” he added, “is the one with the mandate to regulate these companies. We will just follow whatever the IC says” and simply recognize the list of insurance companies authorized by it, he added.

The Philippine Insurers and Reinsureres Association (PRA), the association of all non-life insurance companies in the country with 65 companies as members, welcomed Galvante’s statement as a “whiff of fresh air that the insurance industry badly needs.”

Its deputy chairman, Michael Rellosa, said: “This is certainly great news for all of us” and added, “change is indeed coming.”

Galvante also urged insurance companies to help him fight corruption in LTO and to address insurance fraud. He also said that he is willing to work with insurance executives to develop a database that would address flaws in LTO registration, which are oftentimes cited as a cause of insurance fraud. “Let’s develop a database that could solve this (insurance fraud). Let us work together,” Galvante said.

Meanwhile, Dimacali who formerly was the president of IBM Philippines presented the system he has developed for detecting and preventing fraud through the use of computers and social media, which FPG is now using.

Besides Galvante, the senior superintendent of the Philippine National Police-Highway Patrol Group, Fortunato Guerrero, also vowed to help curb insurance fraud by sharing data with insurance companies and being steadfast in going after those who perpetrate this crime.


Please follow our commenting guidelines.

Comments are closed.