RIYADH, 19 May 2004 — Motor and rukhsa insurance claims cost the National Company for Cooperative Insurance (NCCI), the biggest player, SR306 million last year. An increasing number of them are bogus.
“Out of a total of SR683 million in insurance claims of all types, motor and rukhsa insurance claims alone accounted for SR306 million, or 52 percent of all claims,” Saad Al-Marzouqi, NCCI’s vice president for technical affairs, told Arab News.
“The frequent fraudulent claims seem to be part of an organized conspiracy involving many parties,” he said. He said this was a new phenomenon and deserved careful investigation.
Some other insurance providers colluded with the insured in putting up bogus claims, he said. “There is also internal fraud, perpetrated by employees in insurance companies themselves,” he charged.
He said his company uncovered only four fraudulent claims in 1997, for no more than SR73,000. “We thought it was just a few individuals and it was not necessary to adopt exceptional measures.”
But since then bogus claims have been increasing. “In the first quarter of 2004 we discovered 75 fraudulent claims made between 1997 and 2003,” he said. “Third parties involved in traffic accidents represent the greatest source of fraudulent claims.”
Bogus claims ranged from willfully caused traffic accidents to accidents that never happened. Exaggerated damage also figured prominently,” he said.
