When it comes to White Collar Crime, the Insurance industry is exposed on two fronts: as both victim and as protector. Insurers lose billions to bogus claims, potentially fueling fraudsters if unreported. They also offer many corporate clients their first form of defense against fraudulent activities and theft by employees. This places the insurer in a unique and important position from which to combat fraud.

Many brokers are in the unenviable position of being first in line when it comes to recognising and reporting fraudulent activities. CIB’s White Collar Crime workshop, co-hosted at the end of May with advisors and business partners Clyde and Co, brought together several industry experts to provide guidance on legal obligations, explore reporting procedures and forensic tools, and generally raise awareness around this increasingly sophisticated phenomenon. Four key themes emerged from the event.

Know the legal implications

Clarifying the obligations created by key legislation, including PRECCA, POCA and FICA is an important first step. When it comes to fraud, proof is less important than suspicion. The moment one suspects any fraudulent activity, PRECCA and POCA legislatures in particular may create a very real and enforceable responsibility to report the perpetrators to the Hawks and/or the Financial Intelligence Centre. Authorities and task forces rely on this input to identify much larger crime rings and syndicates that are costing the industry millions of rands. Insurers need to acknowledge the value they can add by committing to consistent compliance with legislation.

Create – and communicate processes

With a better grasp of the legal ramifications, it’s easier to create the appropriate internal processes for reporting fraud. Once these processes are clearly defined and communicated, reporting becomes a far less daunting prospect. With both criminal and civil relief available, insurers assist not only in ensuring criminals are convicted, but also improve their own chances of recouping losses resulting from fraud.

Ensure the right culture

Clear reporting lines, support at board level, and transparent processes make it more difficult for fraud to take place in the first place. A zero-tolerance approach, coupled with highly visible investigations – and convictions – go a long way in inhibiting fraudulent practices.

Be vigilant

The event concluded with an eye-opening presentation by SAICB reiterating just how ingenious, well- organised and insidious fraud and white-collar crime has become. While SAICB’s unified data and methodologies are helping to contain threats and bring criminals to book, it’s clear that insurers have an important role to play to assist the system by being aware, informed, involved and vigilant.

Finally, insurers need to continue to educate those we insure about the implications of white collar crime. It is by no means a victimless crime; it has a far-reaching impact for the industry and customers alike. Adopting a more proactive and aggressive anti-fraud approach sends a powerful message – crime, on our watch, doesn’t pay.