Posted: 12 December 2012 | Source: Chartis Research
The cost of fraud to insurance firms has been estimated at €8bn in fraudulent payouts in the EU and at $30bn for property and casualty fraud in the US. Despite the fact that an estimated 10-15% of annual premiums go towards the cost of fraud, many insurers seem resigned to accepting a certain level of fraud. So many people believe that it is acceptable to defraud insurers that some insurers believe that fraud is an insoluble problem and anti-fraud initiatives should not be a priority.
This needs to change, as the current environment is increasing the cost of fraud to insurance firms. Rising economic pressures and a backlash against all financial institutions in the aftermath of the financial crisis are pushing more people to rationalize insurance fraud. Simultaneously, the internet is making it easier to commit fraud.