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The insurance industry is in talks to establish a structure aimed at curbing fraudulent claims amid concerns about “murder-for-insurance” cases, says Bongani Madikiza, CEO of Sanlam Retail Mass. South Africa’s insurance industry has been rocked by fraudulent claims in which, in some instances, people allegedly kill relatives to get life insurance and funeral policy payouts.Madikiza said Sanlam — one of South Africa’s biggest non-bank financial services groups — pays about R10bn a year in claims, of which between 4% and 6% are fraudulent.“Our biggest issue is when people are prepared to kill to get money; it is a problem,” Madikiza said. The rationale for the proposed structure is to identify fraudsters who target multiple insurers. “If I have been defrauded, I should be able to go to a structure and say this is a person who defrauded us. If there is one criticism as an industry, it is that we did not put that structure together quick enough,” he said. The industry is in discussions to ensure that the structure complies with antitrust laws, he said. Julius Sikhuza, executive of new ventures at Sanlam Retail Mass, said there is precedent for this type of collaboration in the banking sector. “There is precedent for that kind of collaboration. The banks do it well; short-term insurance does it well. It would be useful to have an independent body that looks at the data,” Sikhuza said.The Association for Savings and Investment South Africa (Asisa) said in its previous fraud statistics that the industry is “particularly focused” on eliminating murder-for-insurance payouts and deceased estate fraud. Asisa said that of the 5,505 fraudulent and dishonest life insurance claims recorded in 2024, 38 were murder-for-money cases.Arno Jansen van Vuuren, head of retail marketing at Old Mutual, confirmed that the industry is collaborating to combat fraud. He said Asisa is leading an industry-wide working group investigating the establishment of a platform that would allow insurers to share information on suspected or known fraudulent activities.Van Vuuren expects the industry to benefit from, among other things, shared intelligence and early identification of organised fraud syndicates operating across the industry.“The ability to share relevant fraud intelligence in a controlled and legally compliant manner has the potential to significantly enhance fraud prevention capabilities across the insurance sector,” he said.Van Vuuren said Old Mutual is part of these industry discussions as part of broader efforts to strengthen the sector’s response to financial crime. He said that in 2025 Old Mutual paid R5.6bn in death claims, including funeral policies, and recorded 32 fraudulent claims, all involving death claims, compared with the previous year when 23 out of 30 fraudulent claims related to death claims.The ability to share relevant fraud intelligence in a controlled and legally compliant manner has the potential to significantly enhance fraud prevention capabilities across the insurance sector.— Arno Jansen van Vuuren, head of retail marketing at Old MutualProminent fraudulent insurance claims include those made by convicted serial killer and former policewoman Rosemary Ndlovu, who was found guilty of murdering six people, including her mother, children and life partner after taking out policies on their lives.Commenting on industry efforts to curb fraudulent claims, the head of life insurance marketing and enablement at Momentum, George Kolbe, said the group focused on paying legitimate claims promptly while addressing fraudulent claims swiftly and appropriately. “We will support a workable industry-wide solution that addresses the root of fraudulent activity in a practical way,” he said.Kolbe said that in 2025, Momentum’s Myriad life insurance product paid out R5.9bn in claims to clients and their beneficiaries. This included R3.97bn in death claims, R1.04bn in critical illness claims, R602m in lump-sum disability claims and R310m in income protection claims.While the group views all fraudulent claims seriously, Kolbe said these make up a very small percentage of total claims for fully underwritten life cover products at Momentum.“We monitor trends in this area and remain vigilant to continuously strengthen our detection capabilities to respond to evolving risks,” he said.Read: Fraud drains R30bn from South Africa’s health-care sectorMadikiza said efforts to stamp out fraudulent policies have resulted in calls from some quarters for consent requirements for funeral cover, but warned this would inconvenience genuine policyholders.“We know all these documents are manufactured. That letter of consent will be forged. We get a lot of documents that are forged, and we turn them away. We also think there are some we don’t get.” Madikiza said requirements around proving lineage and obtaining consent for life cover have not necessarily stopped the problem, as people had still been killed despite consenting to policies. “If I know I am not going to get caught, I take a chance. I believe our people believe they will not get caught; the system has become too lax,” he said.He said proof of lineage alone has not prevented fraudulent claims.Sanlam — which acquired Assupol for R6.5bn to expand into the entry-level market — completed 74 conversions across Sanlam Retail Mass and Assupol and opened 27 new branches in 2025. It aims to have more than 200 branches by the end of this year.Business Times
