Fraud risk management in Namibias life insurance sector
Life insurance fraud is a growing issue in Namibia. A recent real-life case in 2024 revealed how easily fraud can occur when identity verification and claim validation gaps exist. This article shares what happened, offers practical ways to reduce your risk, and explains why understanding insurable interest is essential for every policyholder.
A Real Incident That Raised Concern
In 2024, a case came to light where someone used a stolen national identity card and false death information to submit claims to several insurance companies. The fraud led to close to N$550 000 in payouts before it was discovered. This situation shows how important it is for insurers to confirm policyholders’ identity and the validity of claims before making payments.
Simple steps to protect yourself
Here are a few things you can do to protect your identity and reduce the risk of fraud involving your insurance:
Check Your Information
Make sure all your personal and policy details are correct. Ask your insurer to confirm any
updates you make.
Protect Important Documents
Keep your ID and other personal information safe. If anything is lost or stolen, report it
immediately to the police and your insurer.
Watch for Unusual Activity
Review your bank and policy statements often. If you see anything that does not make sense, raise it immediately.
Stay Informed
Read up on how insurance fraud happens. Awareness of the signs can help you act quickly if something feels wrong.
Why Insurable Interest Matters
Understanding insurable interest is a fundamental rule in life insurance. It stipulates that the policyholder must have a genuine reason to take out a policy—such as being the insured person’s spouse, child, or business partner. This rule is in place to prevent anyone from taking out a policy on someone they barely know, thereby reducing the risk of fraudulent claims.
Final Thoughts
Life insurance fraud is a significant risk, not just for insurers, but also for honest customers like you. By learning from real cases, such as the one in 2024, we can better understand the potential pitfalls. By keeping your information secure, asking questions when something seems amiss, and knowing what a valid policy should look like, you can actively contribute to maintaining the integrity of the system.
*Timmy Munikaseke is the head of forensic services and anti-money laundering operations at Momentum Metropolitan Namibia.**
A Real Incident That Raised Concern
In 2024, a case came to light where someone used a stolen national identity card and false death information to submit claims to several insurance companies. The fraud led to close to N$550 000 in payouts before it was discovered. This situation shows how important it is for insurers to confirm policyholders’ identity and the validity of claims before making payments.
Simple steps to protect yourself
Here are a few things you can do to protect your identity and reduce the risk of fraud involving your insurance:
Check Your Information
Make sure all your personal and policy details are correct. Ask your insurer to confirm any
updates you make.
Protect Important Documents
Keep your ID and other personal information safe. If anything is lost or stolen, report it
immediately to the police and your insurer.
Watch for Unusual Activity
Review your bank and policy statements often. If you see anything that does not make sense, raise it immediately.
Stay Informed
Read up on how insurance fraud happens. Awareness of the signs can help you act quickly if something feels wrong.
Why Insurable Interest Matters
Understanding insurable interest is a fundamental rule in life insurance. It stipulates that the policyholder must have a genuine reason to take out a policy—such as being the insured person’s spouse, child, or business partner. This rule is in place to prevent anyone from taking out a policy on someone they barely know, thereby reducing the risk of fraudulent claims.
Final Thoughts
Life insurance fraud is a significant risk, not just for insurers, but also for honest customers like you. By learning from real cases, such as the one in 2024, we can better understand the potential pitfalls. By keeping your information secure, asking questions when something seems amiss, and knowing what a valid policy should look like, you can actively contribute to maintaining the integrity of the system.
*Timmy Munikaseke is the head of forensic services and anti-money laundering operations at Momentum Metropolitan Namibia.**
