Rapid Growth in Delivery Market
Increase in Two-Wheeled Vehicle Accidents
[Asia Economy Reporter Oh Hyung-gil] Jeon Min-woo (45, pseudonym), who operates a delivery agency, deceived delivery workers into enrolling their delivery motorcycles in insurance by claiming they were for commuting purposes. All 19 motorcycles were insured under cheaper home-use policies, saving 44 million KRW in premiums from 2018 to December last year. He also instructed delivery workers to falsely report traffic accidents that occurred during deliveries as commuting accidents, collecting 11 million KRW in insurance payouts. The Ilsan Western Police Station of the Gyeonggi Northern Provincial Police Agency booked Jeon and six delivery workers and company employees without detention last December on charges of fraud and violation of the Special Act on the Prevention of Insurance Fraud.
As the platform-based delivery market rapidly grows, accidents involving two-wheeled vehicles such as motorcycles are increasing. There is a rising concern that the high accident rate caused by dangerous "acrobat driving" to meet delivery times is being exploited for insurance fraud, making urgent countermeasures necessary.
According to the insurance industry on the 5th, the number of two-wheeled vehicle accidents rose sharply by 45.9% over the past five years, from 12,654 cases in 2015 to 18,467 cases in 2019. More than 400 deaths occur annually due to two-wheeled vehicle accidents.
As two-wheeled vehicle accidents increase, insurance fraud is also on the rise. Hyundai Marine & Fire Insurance's analysis of two-wheeled vehicle insurance fraud revealed that the scale of detected fraud increased by 5.4%, from 83.6 billion KRW in 2018 to 83.6 billion KRW in 2019.
The most common type of fraud was drunk or unlicensed driving (26.6%), followed by driver substitution (19.1%) and accident content manipulation (15.6%). Recently, there has been an increase in fraud types involving enrolling in insurance after an accident or adding additional victims to claim insurance money.
This is explained by the fact that platform-based two-wheeled vehicle insurance fraud features smooth information exchange among platform workers, collusion with maintenance shop workers, and the fact that most delivery workers are in their teens and twenties with high social networking service (SNS) skills, recruiting conspirators via SNS. Accordingly, there is a growing trend toward specialization, spread, and large-scale two-wheeled vehicle insurance fraud.
Although the payout amounts are small, two-wheeled vehicle fraud methods are leading to linked and expanded frauds applied to automobile insurance fraud. To prevent this, it is necessary to build data reflecting SNS characteristics when developing insurance fraud detection rules.
Considering these characteristics, cases of detecting insurance fraud are also increasing. Last year, DB Insurance detected 350 insurance fraudsters by analyzing accident frequency, passenger relationships, and accident videos using the Integrated Fraud Detection System (IFDS) after a surge in delivery motorcycle accidents in Daegu. They also won the grand prize at the Insurance Fraud Prevention Best Practice Competition held by the Financial Supervisory Service.
Kim Tae-ho, a research fellow at Hyundai Marine & Fire Insurance Traffic, Climate, and Environment Research Institute, suggested, "It is urgent to develop detection rules for suspected fraudsters that reflect the characteristics of personal and vehicle claims and the patterns of fraud spread to prevent two-wheeled vehicle insurance fraud," adding, "There is a need to establish an integrated management system for insurance fraud suspects."
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