By TERRY BETTY

THE insurance industry - after a hugely successful trial run - is heading inexorably toward the introduction of lie detector tests.

Roger Voysey, managing director of Guardrisk Insurance, underwriter of the BMW insurance scheme which already incorporates polygraph testing, says: "The testing has been a mind-boggling success and we are definitely going to introduce it on other policies. We are working on introducing similar products for other clients."

In the first year of the BMW insurance policy's operation, Guardrisk paid out about R1-million in claims on five vehicles, as opposed to the R120-million bill the insurance industry predicted the company would have to foot for 800 cars.

"Based on the fact that we insured 7 455 vehicles, we were told that 800 of these would be lost in the first year. However, only 35 were lost, and of these 22 were recovered. Four claims were repudiated because the polygraph testing showed the claim was fraudulent, four are under investigation, and we have paid out five claims."

It is estimated that an astounding 35% to 40% of all insurance claims are fraudulent - either because the claimant is involved in the theft or because the claims are inflated.

Up to now, the industry has had no way of proving this and has ended up paying, thereby sharply pushing up everyone's monthly premiums.

But insuring your car through BMW costs less than half of the normal rate.

Guardrisk's David Sanderman says when people buy the insurance they agree to undergo a test if required. He says the polygraph results are sufficient basis for the repudiation of a claim.

While the results are not admissible in court, a crook is not likely to challenge the insurer before a magistrate.

"Each of the four individuals, whose claims average R100 000 each, just walked away - and they'd never have done that if they were not fraudulent," says Sanderman. "However, we do not stop there. If we can prove fraud we will prosecute. In one case we picked up a doctor who appears to also have been scamming the medical aid system, and the papers were handed to police."

The polygraph test is effective not only because of the fact that it can pick up fraudsters, it also deters people from instituting fraudulent claims - few will claim fraudulently knowing they are likely to get caught.