Insurance frauds see an increase during pandemic, says survey
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Insurance frauds have increased during the Covid-19 pandemic and investigations have largely moved to digital channels, a new survey has revealed.
Significantly, more than one in four of the respondents or 27 per cent of those surveyed said insurance frauds have increased during the pandemic.
The findings are part of a survey on “Impact of Covid -19 Pandemic on Insurance Fraud Risk Mitigation and Investigation”, which was conducted by Insurance Institute of India with Lancers Network in collaboration with Association of Private Detectives and Investigators India and International Fraud Trading Group.
“There is also an overall increase in insurance fraud investigations after the onset of Covid-19, with 55 per cent of respondents confirming that their professional activities related to fraud-fighting have either increased overall or increased under a specific area of operation during the pandemic,” the report said.
About 68 per cent of the survey respondents said their organisations were already using digital solutions for investigations, while 19 per cent said they were in various stages of planning the transition to digital.
“The industry’s shift to digital fraud investigations is permanent, with 92 per cent of the respondents affirming that the increased use of technology in investigations would continue in the post-pandemic times. Of these, 71 per cent were specific that more emphasis would be on a digital approach,” it further said.
Significant losses
Insurance frauds are typically committed at the time of applications or claims and cost a whopping ₹45,000 crore every year to insurance companies. Nearly 70 per cent of these frauds are committed through false documents.
According to industry estimates, insurers lose close to 10 per cent of their overall premium collection to frauds.
“This survey confirms, the growing adoption of technologies like artificial intelligence and data analytics are enabling better and faster insurance investigations, which augurs well for the whole industry,” said Deepak Godbole, Secretary General, Insurance Institute of India.
The survey was conducted before the onset of the second wave of Covid-19 and reflects the views for the period from March 2020 till February 2021. Close to 60 industry executives representing various risk mitigation functions, including claims investigation, seeding, pre-issuance profile check, pay and recover, health reimbursement and underwriting participated in the survey.
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