In March 2024, the Beijing police smashed a professional insurance fraud criminal gang that deliberately staged accidents to defraud insurance claims. In this case, a certain insurance company colluded with current and former employees, as well as designated auto repair shops, to fraudulently obtain claims payments through fabricated or intentionally staged vehicle accidents. Not long ago, the Liaoning police also cracked a case of self-staged fake accidents for insurance fraud, resulting in 10 criminal suspects being taken into custody according to law.
On January 12, 2024, the official WeChat account of the Qingdao People's Procuratorate showed that since 2020, Liang and others have purchased second-hand new energy vehicles and staged flooding accidents to defraud insurance claims. In a case heard by Pingdu Court, Wang operated an auto repair shop and colluded with others to fabricate more than 40 accidents to defraud over 1.5 million yuan. Data from Shunyi Court shows that from January 2019 to October 2023, 23 out of 26 cases of motor vehicle insurance fraud involved collusion between auto repair personnel and customers. The modus operandi of car insurance fraud is becoming more covert, with the industry believing that factors such as low cost, high returns, and information asymmetry contribute to its frequent occurrence and variety, such as manufacturing accidents in remote areas at night, according to Liu Chunsheng, who pointed out underlying motives such as profit incentives.
Let's look at another fraud case in Guangzhou. From April 2017 to December 2020, Zhou and Wang conspired to stage car damage accidents, which were then sent to Wang's car beauty service department for assessment and repair to defraud insurance. During this period, Zhou committed 10 instances of insurance fraud, successfully obtaining over 720,000 yuan and attempting to obtain over 30,000 yuan. The People's Court of Sanshui District, Foshan City, ruled that Zhou, with the purpose of illegal possession, conspired with others to stage insurance accidents for fraudulent purposes, with a huge amount involved. He was sentenced to six years and eight months in prison and fined 60,000 yuan.
Tianjin also revealed a similar insurance fraud case. Ms. Zhou and Mr. Liu separately discovered abnormal accident records for their vehicles, and the Tianjin Municipal Public Security Bureau's Economic Investigation Intelligence Liaison Center captured relevant clues through big data screening. The police found suspicious accidents related to luxury cars, and Pan, the person in charge of an auto repair shop in Nankai District, came under scrutiny. It turned out that since the end of 2015, Pan had been planning insurance fraud, registering multiple auto repair companies in the name of employees, deliberately staging accidents, and impersonating drivers to file claims.
Since 2016, this gang has committed over 100 insurance fraud crimes involving nearly tens of millions of yuan. They replaced luxury car parts and staged "collisions" in repair shops, fabricated scene evidence to obtain appraisal reports, and then applied for claims. They used old parts to impersonate original parts and defrauded high insurance claims. Dong, an employee of Pan, cooperated for a long time, and some insurance company agents became "moles." Some vehicle owners cooperated in insurance fraud due to inducements, such as Guo agreeing to save money and receive red envelopes, but the auto repair shop used his car to defraud 400,000 yuan in claims. Finally, this criminal gang was apprehended.
Why is Car Insurance Fraud So Rampant?
Car insurance fraud is rampant due to its low cost and high profitability. Additionally, some members of the public have insufficient understanding of insurance regulations and weak legal awareness. Furthermore, some insurance companies engage in extensive operations and overlook risk assessment, which is another significant reason for the high incidence of such cases. In pursuit of business volume, insurance companies simplify claims procedures excessively, overly relying on third-party evidence. Traditional methods of fraud prevention are inefficient, and there is a lack of information sharing among insurance institutions, resulting in inadequate efforts to combat and prevent motor vehicle insurance fraud.
Analysis shows that there is a noticeable trend towards organized fraud in the car insurance sector, with perpetrators often gathering together to commit fraud in an organized manner. Furthermore, collusion with internal personnel of insurance companies facilitates fraud, leading to a large number of potential fraudulent activities going undetected.
Preventing insurance fraud requires collaborative efforts from insurance companies, traffic management departments, prosecution agencies, and other relevant departments. Through strengthening management, refining procedures, leveraging functions, ensuring coordination, promoting governance, and utilizing big data, a comprehensive prevention system should be established to effectively curb insurance fraud and maintain the healthy and stable development of the insurance industry.