Identifying Insurance Fraud

Identifying insurance fraud

How to identify insurance fraud? What are the measures to be taken against fraudsters?

The problem of fraud in the insurance industry today is one of the most important for all subjects of the insurance market. In a number of insurance sectors, fraud losses can be as high as 10-15 % of insurance claims. According to experts and insurers, in 10 % of cases, the insurance indemnity is either overstated or the payment is made illegally. There are no accurate statistics on fraud losses in Europe, but the magnitude of the phenomenon is enormous. The activity of insurance frauds is activated in proportion to the development of insurance. The number of economic crimes in the insurance market is steadily growing.

According to experts, the losses of insurers from fraud reach $ 400 million per year. Some large companies claim that payments to fraudsters account for up to 10 % of car insurance fees. If earlier, at the initial stage of development of insurance fraud engaged in individual unscrupulous citizens, but now it is the whole criminal group, experienced and well-trained. Security experts cite the following figures; about 60 % of all recorded cases of fraud accounted for insurance agents and professional fraudsters.

The consequences of insurance fraud can be a decrease in demand for insurance services due to the fall in the reputation of the insurance market in the eyes of insurers and the threat to the financial stability of insurers. In most cases, insurance companies do not seek to prosecute fraudsters and try to deal with them within the insurance company. Insurers also often turn a blind eye to fraud, both on the part of insurers and by the competent authorities directly related to the insurance process.

Summarizing the above, we believe that it is possible to effectively combat fraud only on the scale of the entire insurance market through joint efforts of both insurers and the policyholder.

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