MUMBAI: Non-life insurers are moving decisively to tackle motor third-party fraud to curb losses, which have risen due to higher court awards for victims and the impact of uninsured vehicles on premium collections.Go Digit General Insurance said it secured an order from Madras High Court on July 29 to appoint a special investigation team at the district level across Tamil Nadu to probe fraudulent insurance claims. The court directed authorities to investigate cases involving fake accidents, misrepresentation, forged policies, fabricated injuries, and false medical reports and bills, and to initiate criminal proceedings against those responsible.The court also asked police to collect relevant materials, including call detail records, to aid investigations, and ordered departmental action against officials found facilitating or failing to prevent such claims. According to company officials, the case was filed after a rise in irregularities in motor third-party claims indicating fraud.Industry executives said the issue is becoming widespread. According to Krishnamoorthy Rao, MD and CEO, Generali Central Insurance, the trend is adding pressure to an already strained segment. “Motor third-party fraud is likely to become an industry-level issue, as it is adding to losses at a time when there is growing strain due to an increase in the size of awards and a rise in the number of uninsured vehicles. One of the issues the industry is facing is the conversion of non-road traffic accident claims into motor accident claims,” he said.Insurers are also increasing provisions after a recent Supreme Court judgement that introduced compensation under a separate head, loss of domestic care, based on a monthly income of Rs 30,000 with periodic revisions for inflation and socio-economic changes. Earlier, compensation was linked to a multiple of the victim’s income.
