An internal audit in Axa has discovered that a staff member has been involved in a fraud possibly involving more than €1 million in false claims.

A spokesman for the company, which sells home and motor insurance, said the Garda Bureau of Fraud Investigation is investigating the matter.

So too is the in-house fraud investigations manager, Mr Willie McGee, a former Garda fraud bureau detective superintendent.

The employee concerned was paying out on false claims that were effectively being issued to himself. More than 200 such claims may have been processed before the scam was discovered through an internal audit and follow up. It is understood the fraud was ongoing for some time.

Axa and the Garda are trying to assess the total amount that may have been issued on foot of the false claims. The employee concerned is on leave. The company is seeking to recoup the money.

The amount means the fraud is one of the largest known cases in the Irish insurance industry. However, it may be that larger scams have been discovered but not publicised.

The sector believes fraudulent claims cost the sector tens of millions of euro annually. The frauds can be internal, external, or involve staff working with people outside.

Mr McGee was appointed to Axa in 2002 to concentrate on the prevention, detection and investigation of fraud. Last year Axa paid out approximately €400 million in claims.