Crime - a grim picture

One of the unfortunate realities we need to live with in South Africa is that we have a relatively high crime rate. While other developing countries are making concerted efforts to reduce their levels of crime, South Africa seems to be losing the battle.

While the release of South Africa’s crime statistics for April 2013 to March 2014 by the National Police Commissioner caused heated debate from many political and private sector spokespeople, there is no denying the fact that we as South Africans have many reasons to be concerned about our safety and security.

Crime has a direct influence on our industry, which means that we as an industry should probably play a role in decreasing crime? FAnews asked industry players if we as an industry should get involved or are we doing enough as it is?

Treading murky waters

Drew Schnehage, Chief Executive Officer (CEO) of Aquarius Underwriting Managers (AUM), points out that there is seldom a straight answer to these types of questions. “The most important aspect we need to recognise and admit is that we definitely have a role to play and we should take action.”

Justin Keevy, Senior Underwriter of Commercial Crime at Camargue, agrees with this by saying that crime and fraud will always exist, particularly in the South African context where the statistics indicate a population burdened with considerable unemployment and poverty. “An economy will always have opportunistic fraudsters who will try to identify and exploit gaps in any system such as submitting fraudulent insurance claims,” says Keevy.

Playing a role

While there is a mindset that people of authority should be fighting crime, Eric Cilliers, Head of the Special Investigations Unit at Zurich Insurance Company South Africa, feels that crime should be addressed by society and not by a single industry or government department. “The insurance industry is certainly playing a part in addressing crime as it is directly affected by crime. Theft of motor vehicles is an example of where the industry has partnered with the South African Police Service (SAPS) through the South African Insurance Crime Bureau (SAICB) to address vehicle theft,” says Cilliers.

Keevy agrees with this by saying that most, if not all, insurers and intermediaries are impacted by crime in different ways, whether it is claims emanating from hijackings, or an increase in fraudulent claims submitted. The insurance industry does have organisations whose purpose it is to address acts of crime and fraud within the sector.

A crippling effect

While the media is very vigilant in reporting crime, there are still many crimes which go unreported. Although this may remain hidden to the public eye, the industries in which they occur feel the effects.

“The impact is bigger than what most people realise. One of our clients was held up in an armed robbery. It is a month later and we have not had an opportunity to talk to the client to verify her claim. She has been so traumatised that we have not even been able to offer her trauma counselling. This delay is caused by not being able to verify the details or obtain more information. This is a lost opportunity for us as the insurer to do a possible recovery and it is a loss for society as these perpetrators are still out there causing more crimes and damage,” says Schnehage.

Gareth Beaver, Chief Executive Officer (CEO) of Centriq, agrees with Schnehage by saying that “Crime, as we all know, is crippling the country and we as insurers need to do something to make a difference by being more tuned into the needs of not only our businesses and the sectors we operate in, but the needs of the South African citizens as a whole”.

Helen du Toit, Head of Audit and Forensic Services at Santam paints a very realistic picture of the effects of crime on the industry. Du Toit mentions that “Economic crime within the insurance industry affects the sustainability and affordability of insurance as a compensation mechanism and it is therefore crucial that insurers reach out to stakeholders within the SAPS and the criminal justice system to ensure that effective measures are implemented to counter and curb this scourge”.

Businesses are increasingly targeted with robbery at non-residential premises, a sub category of aggravated robbery, showing a 13.7% increase in the last year from 16 377 to 18 615, while truck hijackings have increased by 5.1% from 943 incidences to 991 in the last year.

Making a difference

We need to stand back and ask ourselves, is the fight against crime making any difference?

Du Toit points out that Santam’s data for the 2013/2014 period shows:

• a 10% decrease in reported commercial vehicle theft claims;
• an 11% increase in reported vehicle hijacking claims;
• an 11% decrease in reported personal lines vehicle theft claims;
• a 15% increase in reported business burglaries, which refers to burglaries where there is no contact between a victim and the perpetrator; and
• a 6% increase in reported business robberies.

The statistics released by the National Police Commissioner indicate that carjacking has increased to 12.3% from 9 990 incidences in the previous period to 11 221 cases this year. Robbery with aggravating circumstances showed a 12.7% increase from 105 888 to 119 351. There is an upward trend in trio crimes, which include hijacking and house and business robberies, which were pegged at 49 120 incidences this year.

Nowhere is safe

South Africans are pedantic about security. “We live behind high walls and in secure complexes, but even there we are not safe,” says Mandy Barrett, Manager of Product Solutions-Marketing and Sales at Aon Risk Solutions.

“In 50% of incidences robbers are armed and operate in groups containing three or more people. The focus seems to be on residences where the owners are not home and they are getting away with jewelry, cash and firearms after attacking and tying up domestic workers. In 70% of cases, robbers gained access from a neighbor’s property where building or construction is underway and in almost all of the reported cases, the robbers had internal intelligence observing their target,” explains Barrett.

Secure complexes are not excluded. “Owners are becoming increasingly complacent and are lulled into a false sense of security, often leaving access points and doors open or unlocked, which provides easy access for would be criminals,” she adds.

It is clear that the industry is seriously affected by crime, and working together with other industries and people outside our own industry is the only way to try and make our country a safer place to live in.