Three Out of Four Insurance Fraud Tips Lead to Detection... 4,452 Cases Reported Last Year, 1.52 Billion Won in Rewards

Fraud Amounting to 52.1 Billion Won Detected Through Tips
Number of Tips Up 0.9% From Previous Year

Approximately 73% of insurance fraud tips received through the Financial Supervisory Service and insurance companies contributed to the detection of fraud, according to recent findings.

Yeouido Financial Supervisory Service Headquarters, Yeongdeungpo-gu, Seoul. Financial Supervisory Service

According to the Financial Supervisory Service on April 23, a total of 4,452 tips were submitted last year through the insurance fraud reporting centers operated by the Financial Supervisory Service and insurance companies. Of these, 3,264 cases (73.3%) were found to have contributed to the detection of insurance fraud.

The total number of tips increased by 0.9% compared to the previous year's 4,414 cases. Of the total, 280 cases (6.3%) were received through the Financial Supervisory Service, while 4,172 cases (93.7%) were reported through insurance companies.

By type, tips related to auto insurance accounted for a large proportion, including drunk driving or driving without a license (62.4%), driver substitution (10.5%), and intentional collisions (2.2%).

Through the 3,264 tips, the Financial Supervisory Service uncovered insurance fraud amounting to 52.1 billion won. This represents 4.5% of the total amount detected last year.

The total amount of reward money paid to tipsters who contributed to the detection was 1.52 billion won. Insurance companies paid 1.3 billion won, while the Korea Life Insurance Association and the General Insurance Association of Korea paid 220 million won.

The tipster who received the largest reward last year was paid 44 million won for reporting a case involving a false hospital admission.

Most cases in which the reward exceeded 10 million won involved tips from insiders at hospitals. Additional rewards (up to 100%) were paid to industry insiders.

By type of reward payment, manipulation of accident details accounted for the overwhelming majority (85.1%), followed by drunk driving or driving without a license (57.6%), and manipulation or exaggeration of car accidents (13.4%).

For intentional collision tips, the reward per case more than doubled from 400,000 won in the previous year to 1 million won last year.

An official from the Financial Supervisory Service stated, "Recently, insurance fraud schemes have become more organized and clandestine, so a single tip can play a decisive role in detection and punishment," and emphasized, "We encourage active reporting not only by brokers and hospital insiders, but also regarding acts of arranging or inducing insurance fraud."

The Financial Supervisory Service plans to conduct a nationwide campaign for insurance fraud prevention and education next month. In the second half of the year, it will operate a special reporting period for insurance fraud.