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May 2022

Looming threat of fraud on global insurance

Source: Middle East Insurance Review | Jan 2022

Nearly 60% of those responsible for thwarting the multi-billion-dollar threat posed by global crime rings are not yet up to the task according to a new study by the Coalition Against Insurance Fraud.
 
Globalization of Insurance Fraud Study by IBM and Luxoft surveyed financial crimes experts, data security analysts, government regulators, insurance professionals and others to better understand how anti-fraud experts from around the world are dealing with international fraud rings.
 
The research revealed that fraud fighters in North America were the least prepared for threats from abroad.
 
Coalition Against Insurance Fraud co-chair David Rioux said, “We’ve seen organised scammers exploit the telehealth system; intercept personal information through phishing scams and other data harvesting schemes; carry out ransomware attacks; and run a number of insurance scams using stolen or synthetic IDs off the dark web. These are all attacks that can be launched from anywhere in the world with a decent internet connection.”
 
The findings of the survey revealed that globalised insurance fraud is not a priority at all for 27.7% of respondents and a low-to-medium priority for 57.5% of respondents, leading to a lack of resources and time invested in day-to-day operations fighting global insurance fraud.
 
Nearly half (48.5%) of respondents said they are either ‘very concerned’ or ‘extremely concerned’ about the future threat of global insurance fraud.
 
Most fraud fighters (56.8%) said they do not have dedicated resources or a fraud department. More than half of respondents said technology was either a component (41.3%) or the primary method (11.06%) by which their organisation identifies, tracks, and responds to global fraud. 
The study surveyed fraud fighters in 33 countries across North America, the Middle East, Europe, Asia, and Africa.
 
There is no single estimate of the annual cost of insurance fraud around the world. The Insurance Information Institute found that globally fraud accounted for about 10% of the property/casualty insurance industry’s incurred losses and loss adjustment expenses each year.
 
Less than half of the worldwide respondents felt even ‘somewhat confident’ their organisations are equipped to address global fraud as opposed to the 4% who are ‘extremely confident’ their team is prepared for the challenge ahead. M 
 
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