Fraudulent Canadian P&C claims amount to $300 million in 2005

Property and casualty insurance claims containing some element of fraud cost Canadians between $200 million and $300 million in 2005, according to statistics released at a Toronto roundtable exploring fraud in Canada
“Industry statistics estimate that of the Cdn$20 billion paid out last year in property and casualty insurance claims, 20% to 30% contained some element of fraud – either opportunistic or premeditated,” according to a news release issued by MakePlain Corporation, a North American service provider in business Intelligence, data warehousing, data migration and advanced analytics.
“None of us like to pay higher premiums for our home, health, auto or business insurance, and clearly we are now seeing a critical tipping point in how far consumers are willing to go to avoid those increased costs,” MakePlain Corporation co-founder and CEO Gary Saarenvirta said in a press release.
“While the Canadian health care industry, on the one hand, and the property and casualty insurance industry on the other, recognize the growing problem of fraud, few players have incorporated meaningful fraud detection systems into their operations.”
Saarenvirta said organizations are “continuing to operate in a fiscally irresponsible manner,” choosing to simply pass on fraud-related costs to consumers. “The fraud epidemic is now so large that if it were treated as an industry on its own, business fraud would be one of the world’s largest corporate sectors.”
In a recent national survey by MakePlain Corporation, a majority of respondents believed 3-5% of all healthcare claims in Canada were fraudulent, at an estimated cost of between Cdn$4 billion and Cdn$6 billion.
“The current situation cannot go on unchecked,” Saarenvirta said. “There must be a wake up call for all business and consumers alike, that treating fraud as part of the cost of doing business is unacceptable. Business leaders need to show their commitment to eradicate fraud and take decisive actions to do so.”