KiwiSaver at ten years old
Breaking trust, one answer at a time

Fraud is real, that's why we underwrite, verify, and investigate, and most clients want us to

News reports show that clients still take desperate measures, at times, to defraud insurance companies. That fact is often overlooked when journalists are writing about someone being denied cover for non-disclosure, or a claim payment is held up for weeks while something is investigated. 

Asteron Life, Pinnacle Life, and AA Life, were all the targets in this case. You can read in the article at this link, on goodreturns. Asteron Life unfortunately paid a fraudulent claim, before it was spotted by Pinnacle Life, and then by AA Life (which is a joint venture between Asteron Life and AA). While paying a fraudulent claim is embarrassing, and I am sure that an extensive review is going on to prevent any repeat of that, there is a wider story about fraud. Life cover fraud is difficult, and therefore rare. But fraud involving income protection or medical insurance is much more common, and harder to spot: a claim going on too long, an unreasonable price, or unnecessary tests and procedures can all look just 'arguable'. Insurers worry that they will look mean, or untrustworthy themselves if they dither. That's why a common industry saying is 'if in doubt, pay out'.

But sometimes talking about declines and fraud is a good thing to do. Honest customers like to hear about it. They don't shout about it, but it helps. A very few clients that are strongly motivated by money can spend a lot of time working to defraud an insurer - while insurers are trying to serve the vast majority of honest customers. Most consumers want their cover to be affordable when they aren't claiming, and generous when they need to claim. For them, the message that insurers can be tough on dishonest customers is actually a positive.


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