insurance Fraud

Insurance & ReinsuranceFINC 323 Supervised by : Mr. Hamad AlMoajil

The Insurance fraud problem; from detection to treatment.

Hessa AlSubaie - 201810123Reem Abdulla - 201910221Zainab Abdulla - 201910222 Reem Nasser - 201910358 Hessa Saeed - 201920040

Start

Index

01

Introduction

02

Insurance Fraud Meaning

03+04

Types of fraud “schemes”

05

Financial cost of insurance Fraud

06

Ways of controlling Fraud

07

Technology role

08

Conclusion

01

Introduction

• Insurance frauds affects company in different way.

• Insurance fraud is an intentional action of taking money or any other assets from an individual or company without their knowledge.

• This project is meant to analyze Insurance fraud problem to the complete depth.

02

Basic meaning of insurance fraud

Definition of Property & Casualty Insurance Fraud Property & Casualty insurance fraud is any intentional act committed by one of the parties in the insurance contract to obtain undue indemnities or benefits to them or to others through deception and/or concealment of required documents and/or misrepresentation of information.  Auto: 1. False or inflated theft repair claim. 2. Intentional damage claim. 3. Staged accident. 4. Rate evasion.  Homeowner: 1. False or exaggerated property damage claims. 2. A burglary or theft report that is false or exaggerated. 3. Arson. 4. Claim for intentional damage.

03

Types of fraud “schemes”

 Health Care: 1. Billing for services that were not rendered 2. Billing for a higher-priced service than was actually delivered. 3. Providing and invoicing for non-essential services while claiming that they were required. 4. Billing in two places.  Life & Disability: 1. False death certificates 2. Fraudulent claims from beneficiaries 3. Making a false disability claim 4. Using false documents to sustain a disability claim fraudulently

04

Types of fraud “schemes”

Agent / Industry Misconductcrutches: 1. Theft of insurance premiums. 2. "Churning" — giving a consumer false information in order to persuade them to use the cash value of an existing insurance to purchase a new, usually more expensive policy. Workers’ Compensation: 1. Faking injury. 2. Claiming to be harmed working when injury happened somewhere else. 3. Intentionally misclassifying workers' work codes. 4. Employer neglecting to convey laborers' remuneration protection insurance.

05

Financial cost of insurance Fraud

Nearly 54% of insurance companies say fraud is the most serious danger, affecting all insurance companies and all industries, and causing customers to carry the financial implications, while insurance companies deal with the harm to their brand and reputation. From the aspect of the insurance companies, Insurance company fraud is a direct cause of the financial losses because of the refunds for fake catastrophes. In addition, insurance companies resorted to the policy of raising insurance premiums, and therefore when they apply this policy, they lost a large number of their customers. from the aspect of governments, the government obliged to support insurance companies that are unable to pay the large sums resulting from insurance fraud, which lead to their loss.

06

Ways of fraud controlled by insurance companies and regulation

• Stay Vigilant: Build numerous barriers for catching fraudsters in the prevention of insurance fraud regulation, because scammers are aware of every circumstance and only pay when they have exactly done their fraud.

• Keep up with trends: Another method to control fraud and prevent it from being committed by different individuals is to properly observe the trend and keep a watch on the fraud-related movements.

• Coordinate efforts: Most of the industries that are engaging in the development and issuance of cards, merchants, and other card agencies collaborate to give the best quality of cards to prevent their users from fraud. However, Visa and master both cards offer robust programs that ensure safety.

• Find a Balance: Transaction and instant credit have been done without taking any time, and users need credit and debits both cards that merchants accept.

07

Technology role in helping combat insurance fraud

Following is the role of technology in helping combat insurance fraud:

• Automation and data analytics: The analyst of social media works side-by-side to prevent the information shared on social media that could leading to an adverse situation.

• Social Media and tools for insurers and insureds: Technology is the main hub of creating opportunities for fraud in multiple sectors. Most insurance fraud is committed due to the lack of information by playing the games on a social media platform.

• Wearable technology: Some lawyers are interested in employing the latest wearable technology like smart watches and fitness trackers, which allows them to easily track them and use the data gathered by these devices.

08

Conclusion

Insurance fraud is an illegal act on the part of either the buyer or seller of an insurance contract. Detecting and reducing insurance fraud is a key priority for insurers. Insurance fraud is not a victimless crime. This is reflected in the serious consequences for those found guilty of fraud, which can include custodial sentences. Honest customers should not have to pay the price for fraudsters through higher premiums. The insurance industry continues to strengthen its systems and controls to ensure that all types of fraud are detected and prevented whether committed at the application or the claims stage to minimize the cost of fraud to insurers and therefore the impact on honest customers. Insurers’ methods are constantly evolving to combat changes in fraudster behavior.

Countries with highest insurance fraud %

New Zealand

United Kingdom

Germany

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