60% life, health insurers see rapid rise in fraud

About 60 per cent of Indian insurance companies are seeing a rapid increase in insurance fraud, especially in the life and health insurance space, according to Deloitte’s Insurance Fraud Survey 2023.

“An overwhelming majority of respondents across life and health insurance have indicated that they witnessed a significant increase in fraud over the last two years. Sixty percent indicated a significant increase while 10 percent showed a marginal increase in fraud incidents,” the survey said.

Further, even as insurers consider mitigating fraud as a priority, only 60 per cent of the respondents plan to increase their budgets marginally whereas the rest are likely to keep investments at the same level, the survey showed.

The survey, conducted in Q2FY23, is based on qualitative interviews with key stakeholders/senior management across leading private insurers.

The major factors contributing to the rise in frauds include increased digitisation, remote working post the pandemic and weakened controls. The survey showed that the top five challenges faced by insurers include issues with data protection and privacy, lack of information sharing amongst insurers, problems with data quality, limited use of analytical tools in case of fraud detection and keeping up with the modern fraudster modus operandi.