No single insurer is spared by fraud. Globally, fraud is estimated to cost the insurance industry hundreds of billions of GBP per year. This figure isn’t just fraud on an individual or opportunistic scale, but also the result of insurance fraud networks who represent an industry unto themselves. Fraud networks are sophisticated and well-organized, often because they’re spun out of organized crime groups OCGs). There are corrupt auto body shops, professional accident victims and even lawyers whose sole purpose is to pursue fraudulent personal injury claims.
These organizations are difficult to eliminate. If identified by one insurer, they target another. If targeted by law enforcement, they cross borders and find new jurisdictions. If arrests are made, the remaining bad actors recruit new partners and start afresh. Insurers have begun to realize that they can’t retain a competitive advantage from working to eliminate fraud in isolation. Fraudsters will always wait them out, try new tactics, and victimize them again, because insurance fraud is lucrative. It often funds other organized crime activities, including the distribution and sale of firearms, drugs, and human trafficking.
As a result, fraud is now seen as a collective industry problem, which has resulted in the formation of diverse associations dedicated to harnessing the global power of insurance data and analytics to mitigate fraud and protect communities from these crimes.
Read the full report learn what insurance associations around the world are doing to reduce the risk of fraud for their members.
