Suspicions of insurance fraud are on the rise. In 2020, insurance professionals suspected that 18% of claimed claims could be fraudulent, for this year, that suspicion increased to 20%, according to data from the Friss Insurance Fraud Report 2022.
According to the survey of insurance professionals in various countries, in 2021 the most common fraud schemes in insurance claims were false injuries, non-disclosure of relevant information, simulated accidents, theft of wheels and false report of theft of vehicles. cell phone.
“Creativity and persistence in claims fraud is an ongoing problem for insurers. For 41% of those surveyed, keeping up with the modus operandi of the modern scammer was their biggest challenge in responding to fraud effectively,” according to a report by Friss, a software development company specializing in fraud detection.
The most unusual fraud schemes detected during the past year included cases of government corruption, identity theft to steal merchandise, self-inflicted personal injury and theft of a food delivery truck that did not exist.
When it comes to detecting fraud, 100% of respondents said they have mechanisms in place to identify potentially fraudulent claims. However, only 62% employ a fraud detection technology solution.
“Insurance fraud is an evil that few can escape. It is estimated that between 5 and 10% of the costs of losses come from fraud, reaching over 20% in some lines of business and specific countries”, informed the Friss report.
Despite this, there is good news for insurance companies, as tools are being created to identify and combat scams.
Juan Mazzini, senior analyst at Celent, a research and advisory company for financial institutions, stressed that insurance fraud is an evil that few can escape.
“The good news for insurers and reinsurers is that, through analytical technology based on the use of Artificial Intelligence (AI) and a growing number of available data sources, they now have more tools to combat it,” the specialist emphasized.
When questioning insurance sector professionals about the main fraud detection tools among insurance organizations, 60% responded that they are homegrown solutions, 56% are detected by personal experience in the sector, 33% said they saw red flags in the business rules and 29% through the data provided identified anomalies.
Internal data quality, keeping up with the modus operandi of the modern fraudster, and data and privacy protection are the main challenges in the fight against insurance fraud.
Covid-19 will have a lasting impact on insurance, largely because the pandemic has accelerated digital processes and insurers will be better positioned to take advantage of digital tools to combat fraud.