IT executive Eugene Ong was driving along the Central Expressway last November when a car cut into his lane, clipping his Mitsubishi Lancer's front bumper in the process.

Both cars pulled up at the side and Mr Ong, 37, exchanged particulars with the other driver.

Neither vehicle sustained damage beyond scarred paintwork, so Mr Ong was horrified when he was informed by his insurer early this month that the other party was claiming more than $30,000 for alleged injuries suffered by the occupants of the other car - four men in their 30s.

This was on top of repair claims of "a few thousand dollars".

Mr Ong, convinced that the other party is taking him for a ride, is now helping his insurer to refute the claim.

"There was no impact. It's so blatant," he protested.

The case may seem like a blatant example of exaggerated or fraudulent claims, but proving it can be arduous, which is why insurers tend to settle - often by making counter-offers - rather than go to court.

But what if a video camera and a speed recorder had been installed in Mr Ong's car?

Fleet and transport operators overseas have been making use of such technologies for years to curb fraud and improve safety. It would not be hard to apply them to private vehicles.

The recorded evidence will make things much more difficult for parties who are tempted to make a quick buck from insurers (and other motorists). The insurance companies can help defray the initial cost of installing such equipment, estimated at $700 to $1,000 per car. The equipment is less obtrusive than the electronic road pricing in-vehicle unit.

Similar technologies can also help to instil safe driving habits.

In fact, insurers in Europe are already embracing what is known as telematics insurance. The term refers to the use of satellite navigation technology to gauge driving patterns, allowing insurers to offer pay-as-you-drive policies to suit individual needs.

Unlike conventional insurance, it can be precise in pegging premiums to risks. For instance, the more recklessly you drive, the higher your premiums.

According to international consultants Frost & Sullivan, the European market for telematics-based car insurance is poised for explosive growth in the next few years.

Motor insurers in Singapore should look at using technology to help them fight the scourge of inflated claims, which are in the spotlight again, with injury-related cases taking centre stage.

Last month, the General Insurance Association (GIA) said it received 151,583 accident reports last year - the highest figure in five years.

As a direct or indirect consequence, the industry incurred motor underwriting losses of $103.2 million.

While industrywide statistics on injury claims are not immediately available, leading insurers have told The Sunday Times they see a worrying trend. One top player said the number of cases it processed last year had more than doubled to 300 a month.

And such claims typically involve bigger sums than repair claims - as Mr Ong's case shows.

The industry has been trying for ages to stamp out inflated claims. Next month, it will try again. It will be in motorists' interest to see it succeed as runaway claims have a direct impact on their insurance premiums.

The thrust of the GIA's new accident-reporting regime involves making it mandatory for motorists to report accidents to their respective insurers within 24 hours.

While details are still not out, the premise of this new reporting system is simple: People are less likely to lie if they are required to give an account of what happened immediately. And there will be fewer opportunities for other parties - such as shady workshops and eager-beaver lawyers - to enter the fray.

One indication that this effort will have a higher chance of success is that the GIA has the unanimous support of all 29 motor insurers, unlike the previous scheme of setting up Independent Damage Assessment Centres.

While the improved cooperation is a big step in the right direction, the industry should look under every stone in its quest.

Technology, for one thing, will give it huge leverage. Insurers can start with a small trial fleet equipped with windscreen-mounted wide-angle cameras.

Beyond that, the industry must ensure the entire claims ecology is sound. It can start with these questions:

Should the same damage surveyors represent insurers and workshops - a situation where conflicts of interest exist?

Should loss adjusters in this field be better qualified?

Should claims managers in insurance companies be rotated so that they do not get too familiar with workshops or surveyors, or become complacent?

And, finally, should insurers insist on harder evidence than a doctor's letter for injury claims? For instance, magnetic resonance imaging (MRI) for someone who claims to be suffering from neck pain.

MRI can detect even the slightest sprains. From the images, doctors can often tell the difference between a degenerative condition and a case of trauma.

Isn't technology simply wonderful?

This article was first published in The Sunday Times on Apr 27, 2008.