Insurance Australia Group Ltd · ASX:IAG
Insurance Australia — Investor Presentation (May 2002)
13 slides from Insurance Australia's investor presentation, May 15, 2002
Slide 1: Fraud & security risk
Fraud & security risk Nola Watson, Head of Fraud & Security Risk 15 May 2002 Insurance Australia Group Limited ABN 60 090 739 923
Slide 2: Outline
Outline • Fraud and security risk department • Extent of fraud and theft • How we manage the risk • Future strategies • Benefits Insurance Australia Group Limited ABN 60 090 739 923 2
Slide 3: Fraud & Security Risk
Fraud & Security Risk • Reports to Chief Risk Officer & Group Actuary • Mainstream into normal business processes • Staffed by teams of specialists operating nationally • Operates across all business areas Insurance Australia Group Limited ABN 60 090 739 923 3
Slide 4: Extent of fraud
Extent of fraud • Issues in quantifying fraud • US estimates of insurance fraud at more than US$20 billion per annum (NCIB) • Australian estimates in excess of A$500 million p.a. (excludes CTP and workers compensation) (ICA) • Recorded instances of all fraud in NSW in 2001 rose 16% (BOCSAR) NCIB - N
Slide 5: Fraud - underlying causes
Fraud - underlying causes • Non-violent and perceived as “victimless crime” • Rationalised as a perceived entitlement • Relatively high level of community tolerance • High reward and low risk compared to other crimes Insurance Australia Group Limited ABN 60 090 739 923 5
Slide 6: Motor vehicle theft
Motor vehicle theft • Australia has one of the highest frequency rates in the world • Total cost of car theft estimated at $1 billion per year Q • Cost of car theft claims in IAG over $150 million last year (2000/01) Q National Motor Vehicle Theft Reduction Council Insurance Australia Group Limited
Slide 7: Types of theft
Types of theft • Opportunistic theft – Generally recovered vehicles • Organised theft – Usually damaged or unrecovered vehicles Insurance Australia Group Limited ABN 60 090 739 923 7
Slide 8: Managing the risk
Managing the risk • Holistic approach to prevention and detection • Research on patterns and trends • Fraud detection and awareness programs • Expertise in technical, scientific and forensic areas • Tactical and strategic analysis • Quality investigations • Fraud hotline Insurance Australia Group Li
Slide 9: Community benefits
Community benefits • Support for law enforcement and crime reduction strategies • Community initiatives to help potential victims to minimise their own risk • Relationships with industry groups Insurance Australia Group Limited ABN 60 090 739 923 9
Slide 10: A balanced approach
A balanced approach • Recognition that most people are honest • Less than 1% of claims denied • Support corporate values of the company • High ethical standards • Internal and external review procedures in place • High success rate for IAG at Insurance Enquiries & Complaints Ltd Insurance Australia
Slide 11: Trends and case studies
Trends and case studies • The very, very unlucky • Motor vehicle re-birthing Insurance Australia Group Limited ABN 60 090 739 923 11
Slide 12: Future strategies
Future strategies • Anticipate new threats • Capitalise on leading edge technology • Support core and emerging business strategies • Invest in developing capability Insurance Australia Group Limited ABN 60 090 739 923 12
Slide 13: Conclusion
Conclusion Benefits of an active fraud & security risk unit include: • Reduced exposure to fraud and theft • Improved profitability • Reduced premiums for policy holders • Lessen the impact of crime on the community Insurance Australia Group Limited ABN 60 090 739 923 13
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