MAINTAINING AN ETHICAL CULTURE AND MANAGING FRAUD
Fraud is a major threat for all businesses, but is of particular relevance to the insurance sector. According to the Kroll Report, it is estimated that fraud costs the international short-term insurance industry an average of 7% of Gross Written Premium (GWP), and occurs at a number of levels, both internally and externally. During times of financial pressure, such as a recession, the risk of fraud increases. It is during this time that an astute business focuses more energy on putting processes in place to reduce opportunities for fraud.
To ensure robust controls for managing fraud, we have identified our top five fraud and ethics risks as:
- False insurance claims,
- Corrupt procurement relationships between staff and suppliers,
- Theft and misuse of sensitive and confidential information,
- Brokers providing false underwriting information, and
- Brokers abusing authority or position to influence decisions.
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Establishing and maintaining an ethical corporate culture is regarded as a corporate governance requirement that should be governed by the company board. At Santam, we believe that an ethical culture results from ongoing corporate commitment to integrate and align our company’s ethical standards with our business strategy and operations.