If you thought non-life motor vehicle underwriters had things easy, then you know little about the dark web, high and low Controller Area Networks (CANs), relay attacks, signal jammers and the inimitable LONSDOR 500. These and other 21st Century motor vehicle crime-related phrases were introduced during an insightful presentation to the 46th Insure-Talk event, held online recently. The audience was treated to a double-header dealing with the impact of hijacking and theft on South African insurers.

Hijacking and theft hotspot

First up, David Chow, Regional Coastal Manager: Engineering and Construction at Bryte Insurance, commented on the evolution of the motor vehicle hijacking and theft claims under the heading ‘From Allen Key to AI’. “Crime continues to increase at an alarming rate,” said Chow, diving into some South African Police Service (SAPS) statistics to stress his point. Over 2022-23, the SAPS recorded 22 702 carjackings with these numbers being skewed towards the KwaZulu-Natal and Gauteng provinces. These provinces are severely impacted due to their proximity to land borders, the favoured ‘export’ route for vehicle crime syndicates. 

Chow noted that 5 100 cars were hijacked between January and March 2023, or almost 60 vehicles per day, with an alarming 37 400 vehicles stolen over the 2022-2023 reporting period. He estimated countrywide non-life insurance losses due to motor vehicle hijacking and theft at a staggering R8.5 billion. “SA insurers are being impacted to the tune of R8.5 billion per annum,” he said, explaining why it is so important for insurers to underwrite sustainably. 

More than half of this R8.5 billion in insured vehicle value is ‘exported’ over the country’s land borders, destined for chop shops or re-registration elsewhere in Africa. “R4.9 billion worth of vehicles are being taking cross border, [causing significant damage] to insurers and the domestic economy,” Chow said. As for the balance, around R3.9 billion remains in South Africa as potentially re-cloned vehicles with just over half-a-billion ending up in domestic chop shops. Ironically, the cost pressures passed on to consumers and insurers through the OEM parts channel is also driving demand for stolen parts. 

Prevention vs cure in the crime context

They say prevention is better than cure; but how does this translate in the world of motor vehicle crime? On the prevention side, the country’s law enforcement agencies need to step up the identification and ‘take-down’ of criminal syndicates. But crime fighters can only do so much, and it will require government to address the country’s poverty and unemployment crisis to make a long-term dent in the problem. Until such time as the number of motor vehicle hijackings and thefts are brought under control, it will be up to the country’s insurers to mitigate this social ill using sustainable underwriting. 

The extent of annual losses has already forced local motor insurers to consider and implement a range of policy level underwriting interventions. For greater impact, they need the industry to address the glaring problem of the lamentable insurance penetration across South Africa’s vehicle fleet. The presenter identified poor coverage as a serious impediment, arguing that the near 70% uninsured ratio was simply unsustainable over the longer term. It has become increasingly difficult for insurers to recover damages from uninsured road users, leaving the insureds and their insurers to carry an ever-rising financial burden. 

The impact of soaring motor vehicle thefts translates to higher premiums and punitive risk mitigations and policy restrictions, explained Chow. “The underwriting criteria start becoming more aggressive because insurers are trying to control the book to make it run more sustainably,” he said. Insurance brokers are at the coal face of informing their clients of some of these measures, including higher excesses; the need to install multiple tracking devices; and usage related excesses, to name a few. 

From stats to ‘best practise’

Having shared the ‘lay of the land’ insofar the intersection of crime and motor insurance sustainability, Chow handed the microphone to Louwrens Liebenberg, Head of Short-term Insurance Operations at the Insurance Crime Bureau (ICB). Liebenberg introduced the ICB as an institution aimed at tackling organised crime that affected the broader insurance industry, with an inevitable focus on motor vehicle crime. He shifted the discussion from crime statistics and underwriting best practises into the criminal underworld, focusing on some of the main techniques being used by criminal syndicates and opportunists to steal motor vehicles. 

The easiest way to steal a vehicle remains getting your hands on the key or fob. “We currently see a lot of pick-pocketing cases being reported; the criminal or syndicate members love following ladies while they are doing their shopping; they tail these victims until they get an opportunity to sneak car keys out of purses or handbags and then head into the parking lot where they press these remote until they ‘unlock’ the car they had their eyes on,” Liebenberg said. This is considered an old school technique. 

In reality, the introduction of customer-focused technology has forever changed the dynamic for professional car theft syndicates; the days of using coat hangers, hacksaw blades and screwdrivers to force entry and take possession have given way to tech-savvy criminals who exploit digital vulnerabilities in vehicle systems. “In essence, our motor vehicles have become integrated with the Internet of Things (IoT); vehicles are managed by computers and networks that are vulnerable to hacking,” Liebenberg said, before sharing some chilling videos of technology-backed vehicle theft techniques in action. 

An exploit of the keyless entry

The first technique shared with the virtual audience involves an exploit of keyless entry, described under the heading ‘total key loss’, though your writer likes the phrase ‘fob compromise’. In the first instance, criminals use a commercially available key fob emulator; they break open the window of the targeted vehicle, lean into the vehicle, disable any intruder sensors and then plug into the On-board Diagnostics (OBD) port underneath the steering wheel. This allows them to use the key fob emulator to re-code a key for the vehicle. Another impressive bit of kit allows the criminals to jam the signals being sent from installed tracking devices as they drive away. 

Liebenberg revealed that the jammers being used were often military grade, requiring criminals to keep them cool with ice and / or computer fans during the theft and getaway. “A lot of the devices for defeating vehicle ignitions can be bought online, some being legal to use in South Africa and others downright illegal,” he said. In the latter case, criminal syndicates purchase the tech on the dark web, relying on sellers in countries like Poland and Ukraine. The net effect here is similar the total key loss that a pickpocket victim would suffer. 

The next technique is described as a ‘relay attack’. This involves a criminal syndicate, often operating in teams of three, using a device to strengthen the signal from the keyless entry fob. Again, a video was shared to demonstrate this crime: a criminal carrying a backpack containing a signal booster will follow the victim as he or she walk away from the vehicle while an accomplice works at the target vehicle’s door, using a second device to gain entry and start it. “These are the two basic key methods,” Liebenberg explained. “The one is the total key loss, and the other is a relay attack where the signal is boosted, exploiting keyless entry.” 

The car theft CAN-CAN, high and low

Alas, it did not end there. The ICB’s expert went on to describe another compromise that involved an external hack of a vehicle’s wireless network to initiate an emergency start event. The exploit involves interacting with the vehicle’s high and low Controller Area Networks (CANs). “If you can hack into the BUS, you can then gain access to that vehicle’s CAN; you do not even have to get inside the vehicle,” Liebenberg said. In the video example, criminals exploited a weakness involving the front left headlight of certain vehicles, gaining access using a device and probe. 

“The effects of hijacking and thefts on insurance company policies include increased premiums; fewer vehicles being insured because of unaffordability; increased restrictions; and the requirement to install additional theft protection systems,” concluded Chow. He warned against seeing the insurer as the villain in this context, arguing that these interventions were necessary to balance consumer protection and insurer sustainability. 

Writer’s thoughts:

In the days when copper cable theft was rife, your writer figured combatting that crime would be as simple as targeting scrap dealers, cutting distribution. QED? Maybe not. Can you think of any practical, simple solutions to combat vehicle hijackings and thefts? Please comment below, interact with us on X at @fanews_online or email us your thoughts editor@fanews.co.za.