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Lack of fraud investigations hurt ICBC’s bottom line

Much of the $100-million price tag ICBC was forced to pay last year for bodily injury claims could have been prevented, says the Private Investigators Association of B.C. (PIABC).

Much of the $100-million price tag ICBC was forced to pay last year for bodily injury claims could have been prevented, says the Private Investigators Association of B.C. (PIABC).

The asociation said Wednesday the current increase in claims and settlement costs could be reduced with more thorough investigations into suspicious cases.

“Our members report that ICBC dramatically reduced the use of professional investigation in suspected fraudulent injury claims,” said Taras Hryb, president of the PIABC. “Such investigations are an important tool in claims risk mitigation and are part of standard practices for insurance companies across North America.”

Last week, ICBC reported a $200 million drop in 2010 net income, largely due to a $100 million increase in claims costs.

“The increase in bodily injury claims in 2010 is a particular area of concern,” ICBC said in a release, adding that it saw an increase in both the number of bodily injury claims as well as the costs associated with them.

An increase of one injury claim per 1,000 vehicles can cost $100 million in additional claims, the organization said.

The PIABC believes the increase in claims costs is tied to ICBC’s current mandate to cut costs and reduce the amount of work it farms out to private investigation firms.

“That mandate does not place a high priority on identifying and investigating suspected fraud,” Hryb said.

ICBC spokesman Adam Grossman said the PIABC’s claims were a self-serving attempt to get more business for private investigators.

“We don’t at all see the link between fraud investigations and the increase in bodily injury claims,” Grossman said. “We’ve seen nothing to substantiate the assertion that the drop in the use in PI’s has had an effect on our [bodily injury] claims, not one piece of evidence whatsoever.”

He confirmed ICBC has used fewer private investigators in recent years, but said that’s mostly due to the fact that overall claim volumes had declined in previous years, leading to less of a need for investigators.

Grossman also said ICBC has improved its own in-house resources and employs 60 officers in a special investigators unit, with 25 support staff that look into 2,800 causes of potential fraud every year.

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