Insurers should be more willing to share information on customers to help plug a loophole in the system and prevent fraudulent claims, said media reports citing industry experts.
Of the 62 insurers in the UAE, 45 offer motor insurance. Of those, 34 cover 5,000 or more vehicles. So far, 21 share a database, reported The National.
Establishing a central repository of insurance claims data within the UAE market is vital, particularly when related to actual claims and accident experience, said Mr Walid Sidani, President of Sidani Innovative Management Services.
“Real-time access would have a substantial impact on how risk profiling and assessments are conducted on a vehicle and driver,” he said.
A centralised database would “allow insurance companies to gauge and fine-tune their pricing model, based on historical driver behaviour and actual vehicle claims experience,” Mr Sidani said.
Companies not included in a database may not be able to identify a potential client’s risk of filing a fraudulent claim and may suffer losses, said Mr Pascal Persoon, Chief Executive of eData in Dubai, which has collected information on 1.5 million motor vehicle claims in the emirates.
He said an insurer’s chief executive recently admitted to him to losing more than AED400 million (US$108.9 million) in fraudulent claims over the past few years.
“It was because of a big loophole in the whole system where a number of drivers with bad driving records or drivers with fraudulent claims all went to this particular company,” he said.
People who caused accidents often move to a new insurer to get a lower premium.
“Certain groups talk to each other and refer those with multiple accidents to insurers that do not perform any routine background checks or verification,” Mr Persoon said.
AED1 = US$0.27