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Fraud is an important industry issue, which can have far-reaching consequences.

Insurance fraud is a crime and a cost to our community and every policyholder.

Insurance fraud

Insurance fraud is an illegal act in which a consumer lies to an insurer to gain a benefit.

Most insurance fraud occurs at claim time, through claims for

  • events/losses that didn’t happen
  • staged losses – for example, arson and vehicle theft
  • exaggerated claims

In addition, a large number of fraudulent claims occur for non-disclosure of information that insurers require, in order to match the correct premium to the risk.

If you suspect someone has committed insurance fraud, report it

Ring 0508 FRAUDLINE (0508 372 835), email or download a fraud reporting form.

Reports can be made anonymously and all information is kept confidential.

Fraud is expensive

It is hard to accurately quantify how much fraud the insurance industry suffers but based on local and international surveys, ICNZ estimates fraudulent insurance claims cost between around $615 million dollars every year.

Fraud affects everyone

There is a misconception that insurance fraud is a victimless crime — that nobody personally suffers a loss, but huge wealthy insurance conglomerates make extra payouts from their wealth funds. 

That isn't true. Everyone who pays premiums suffers when fraud occurs. 

 An Insurance Council fraud survey in 2005 found that 13% of respondents believed insurance companies could easily afford to pay. That isn't true. Insurers have to bear the cost of fraudulent claims. This increases their overall costs and results in higher premiums for all customers.

If insurers can reduce insurance fraud through efficient policing of claims, the cost of insurance will be lower. When the cost of insurance is lower, more people will be able to afford to insure themselves, their assets and their possessions.

What's being done

Insurers are taking a number of proactive steps to reduce instances of fraud, including

  • providing specialist claims training and investigators
  • working with the Insurance Claims Register (ICR) and the fraud hotline
  • prosecuting in suspected incidences of fraud.

Specialist training & investigators

All staff who work with insurance claims receive fraud detection training. They're taught to refer to lists of signs that may indicate fraud when reviewing and processing claims. If a staff member working with a claim notices 1 or more of these indicators, they will refer the claim to a specialist claims team or investigator.

Investigators are often ex-Police officers who've received special insurance and fraud detection training. They work through the details of a claim to ascertain whether there has been any fraud committed.

Claims can also be referred to investigators for reasons other than fraud, such as a need to understand the circumstances around an event better. If your claim is referred to an investigator, it doesn't automatically mean your insurer suspects you of fraud.

Arson is a major problem in insurance claims and for almost all large fires, insurers appoint specialist fire investigators who'll check for suspicious circumstances that might indicate fraud.

ICR and fraud hotline

The insurance sector keeps a centralised register of insurance claims called the Insurance Claims Register (ICR). The ICR is used to

  • check whether full disclosure of claims history has been made
  • whether claims for the same loss are being made with more than 1 insurer.

The ICR has been operating for 17 years. There are more than 8 million claims in its database.

Learn more about the ICR

Some companies will also check the ICR when policies are taken out to make sure they have been given correct information. This helps them ensure that the policy premiums have been set at a level that correctly reflects the risk.

ICNZ also operates a reporting service. People can call 0508 FRAUDLINE (0508 372 896) anytime to report suspected insurance fraud. They can also email or download a fraud reporting form.

Reports can be made anonymously and all information is kept confidential.


Insurers will prosecute fraudsters through the courts when they have clear evidence that a claim is fraudulent. The insurance industry has a Memorandum of Understanding with the Police, which sets out procedures for the prosecution process.