Category Fraud/Crime

Crime rates… facts in numbers

31 January 2019 Myra Knoesen
Garth de Klerk

Garth de Klerk

The Insurance Crime Bureau (ICB) celebrated its tenth anniversary as an organisation in 2018, and the Board is confident that it has made enormous strides in the last few years to fulfil its objective to fight organized crime in the insurance industry.

Having released their 2018 annual report, Garth de Klerk, CEO of the ICB, stated that fraud and physical crimes in South Africa still remain challenging.

The statistics in the ICB 2018 Annual report reflects that while some of the crimes seem to have stabilised, the overall picture remains concerning. “It is thus imperative we join forces with Government in order to provide South Africa with a truly holistic crime combatting solution,” said de Klerk.

Its all in the numbers

According to Stats SA 1.5 million incidents of “Household Crime” occurred in the period – a 5% increase on the previous year. House breaking, or burglary accounted for 54% of these statistics at 832 122 events or 2 280 incidents per day.

One of the challenges ICB found in interpreting the statistics is the element of unreported crimes. It is believed that there is a high volume of incidents not included in these statistics where incidents are not reported, as either the victim was not insured or does not have faith in the police to solve the crime.

An estimated total of 2.2 million crime incidents were recorded in the period 1 April 2017 to 31 March 2018 - this equates to 6 027 crimes per day.

According to the report 20 306 murder cases were reported, an average of 56 per day this is up from 2017; 18 215 attempted murders were reported for the period; 50 652 cars were stolen, down from 2017 which were recorded at 53 307 and carjackings reported at 16 717. There were 71 131 business robberies and burglary incidents, which is significantly down from 2017. Over 43 000 residential robberies and burglary incidents were reported, up 7.3% - a 10 year high.

Cash in transit incidents have increased dramatically and the South African Banking Risk Information Centre (SABRIC) reported 398 incidents in the period, including incidents where the cash was hit on the way to the van.

Just how far it goes

In their annual report the ICB highlighted some case studies which we thought would be interesting to share. These are just some of the cases the ICB has dealt with, and are currently dealing with.

Paper kids: case study one

During 2018, the ICB noticed a considerable spike in fraudulent claims for children. The modus operandi is that “parents” are covering children on their policies or alternatively the children are covered as family members.

However, these kids are merely “paper kids or ghost children”, registered fraudulently on the population register, and then claimed to be deceased purely for insurance claims purposes. ICB noted a surge of claims emanating from the KZN area.

The ICB is currently investigating a matter where a child of 13 years, who purportedly died under strange circumstances, was later discovered to be alive. An official death certificate was issued in the name of the child, and she was also buried by an undertaker who confirmed the burial. The obvious concern is who is the child that was buried? As it is obviously not the child alleged by the family to have died.

The ICB’s investigation established that this death was part of an insurance fraud scheme to receive multiple pay-outs from insurers, where the deceased child was covered under various family policies.

The challenge the ICB faces is how to identify the child that was buried, with very limited information on the description of the deceased.

Syndicated vehicle fraud: case study two

The syndicate made use of 68 vehicles. Mostly bank repossessed vehicles purchased on auctions far below the vehicles actual value, as there are normally mechanical problems with the vehicles.

This syndicate consists of 89 people, the majority of which are money mules. The syndicate uses false identities to submit false roadworthy certificates used to register vehicles on Natis, creating a history for the vehicles. They then insure the vehicles and thereafter report serious accidents.

The top structure of the syndicate consists of seven kingpins, with an additional seven people recruiting the money mules. The MO is that the syndicate will stage an accident where one of the syndicate’s insured vehicles will be involved in a collision, with one of the other uninsured vehicles as a third party.

This will occur multiple times where the same uninsured vehicle will be the third party in the accidents, and then the uninsured vehicle will become an insured vehicle that is involved in an accident with a different uninsured vehicle. This investigation entails 45 incidents in which false identities and vehicles are used multiple times. These incidents occurred between 2014 and 2017 and the quantum involved is approximately R20 million.

The strategy of the ICB    

In May 2018 the Board reviewed the organisation’s achievements as regard obtaining the objectives agreed in Horison 1 (the first phase of the ICB’s 5-year strategy) of the strategy. These objectives were brand awareness, growing the life membership, resource planning for the long term, develop training as a product and Board governance and risk control.

The Board agreed that all of the above had been successfully achieved and embedded into the future direction or culture of the organisation.

Moving forward, and building on these successes, the team has now begun to focus on Horison 2 with some really exciting objectives as follows: utilisation of data assets, world class reporting, becoming better equipped in terms of technology, studying the emerging risk of cyber crime, cementing the existing position as a “crucial part of the eco system” while remaining the “credible go to solution” in terms of insurance related crimes.

“As we build and expand our operational and strategic abilities we are looking to partner with like-minded entities in the broader financial services sector, with the ultimate goal of reducing the effect of crime in South Africa” concluded de Klerk.

Editor’s Thoughts:
The case studies above are testament to how big the challenge really is and concept of coming together to combat syndicates, insurance fraud and the related crimes in South Africa. It is a calling which needs to be strategically implemented to be properly effective. Do you believe crime in SA could be minimised as a result of collaborative efforts or does something else need to happen in order for us to really see the change? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts

Comment on this post

Email Address*
Security Check *
Quick Polls


Do you think the 21-day lockdown declared by President Cyril Ramaphosa will contain the coronavirus outbreak?


Things will only get worse
Only time will tell
A E fanews magazine
FAnews February 2020 Get the latest issue of FAnews

This month's headlines

2020… The start of a new decade
Updates to the insurance regulatory framework
Funding in the golden years… Past the 100s
Anticipate unprecedented types of claims
Risk trends and their interconnections
Digital transformation in healthcare
Global bond investments getting riskier
Subscribe now