Over the past five years, insurance fraud in Malaysia has resulted in significant financial losses, with authorities reporting 97 cases amounting to RM8.57 million. Datuk Seri Rannli Mohamed Yoosuf, head of the Bukit Aman Commercial Crime Investigation Department, highlighted that, although only one case has been reported this year, the financial repercussions remain under investigation.
Fraudulent activities, particularly false accident claims, are the most prevalent, causing losses of RM226,402.10. Other significant scams include criminal breaches of trust by insurance agents, which have led to RM3.26 million in losses, and fraudulent claims against the Social Security Organisation, totaling RM4.95 million.
Chua Kim Soon, CEO of the General Insurance Association of Malaysia, emphasized the growing need for vigilance as fraudsters are increasingly utilizing sophisticated technologies like artificial intelligence to deceive victims. “Insurance fraud affects everyone, leading to higher costs of goods and services, and can result in insured properties being either unnecessarily damaged or improperly repaired,” he stated.
Common scams involve staged accidents, fake injury claims, and even fabricated deaths. In extreme cases, some policyholders have gone as far as committing arson to collect insurance payouts.
To combat these fraudulent activities, the public is urged to use the Semak Mule system and the National Scam Response Centre hotline (997) to verify bank accounts and report suspicious transactions.
The insurance industry is also taking steps to prevent fraud, utilizing systems like the Fraud Intelligence System, which identifies patterns across insurers, and the Claims and Underwriting Exchange system, allowing insurers to cross-check policies and claims. However, Chua pointed out that limited resources make fraud investigations a significant challenge.
Despite these efforts, experts stress that continued vigilance is necessary to minimize the impact of insurance fraud on both consumers and the industry.
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