Insurer Inaction

Laboratory Scandal Weighs on Allianz

Bernd Schottdorf Source Wolfgang Maria Weber cropped 36728266
Laboratory tycoon Bernd Schottdorf is causing Allianz problems.
  • Why it matters

    Why it matters

    The world largest insurer might face accusations of willful mismanagement for not reclaiming a six-digit figure lost in fraud cases.

  • Facts

    Facts

    • Bernd Schottdorf, former lab operator, is accused of systematically overcharging insurance companies, and of aiding 1,000 doctors in doing so as well.
    • In the case under investigations, private insurers lost €500 million in unrightful charges.
    • Because of Allianz’ inaction, many of the cases might be beyond the statute of limitations by now.
  • Audio

    Audio

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It was a message that must have sent the pulse of the Allianz specialists in Munich skyrocketing. It’s the experts’ daily bread to guard the money of Allianz, the world’s largest insurance company. And then, early August 2008, there was this letter by the state police in Munich.

“The task force lab,” it read, had opened an extensive judicial inquiry into then laboratory tycoon Bernd Schottdorf and his many, many doctor clients. The letter spoke of the “strong suspicion” that they had wrongfully billed specialized lab tests to private insurance companies. In other words, Allianz might have incurred tremendous losses.

But there was more. In mid-2009, the state police even opened its archives to Allianz. The insurance company had access to names and addresses of almost 1,000 physicians suspected of fraud. That paved the way for the insurer to reclaim money.

For Allianz, that was like winning the lottery. Every insurance company is obligated by law to handle the money from insurance premiums responsibly. Clients and shareholders have a legal claim to ensure the insurer does just that. 1,000 doctors charging excessive prices over years, thus, must have been a red flag for Allianz.

According to state police calculations, private insurance companies were entitled to reclaims totaling €500 million from the physicians under investigation. Allianz, as Germany’s largest private insurer, most likely bore the lion’s share of the damage.

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