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Coronavirus raises fears of increase in insurance fraud – Insurance Business

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Looking back at the 2008-2009 economic recession, the Florida Division of Insurance Fraud reported a 21% increase in referrals compared to 2007-2008. More broadly, as incomes fell, the most common types of fraud that spiked included vehicle insurance fraud, mortgage fraud, and workers’ compensation premium fraud, according to a report by BAE Systems. Even in good times, insurance fraud is pervasive. Fraud accounts for 5-10% of claims costs for US and Canadian insurers, as noted by the Coalition Against Insurance Fraud, and 32% of insurers have said that fraud was as high as 20% of claims costs.

Read more: Fifth Third sheds light on cyber event, now classified as a fraud scheme

“It’s really hard to get out in front of fraud. Oftentimes, the reality is we’re reactionary, not proactive, to new schemes because we don’t sit around trying to dream up how to defraud ourselves,” said Flato.

Despite these challenges, the Liberty Mutual executive added that he does believe the insurance industry is getting better at identifying and preventing fraud. Anti-fraud efforts are a significant area where carriers look for…



Read More: https://www.insurancebusinessmag.com/us/news/technology/coronavirus-raises-fears-of-increase-in-insurance-fraud-231808.aspx

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Source: https://www.insurancebusinessmag.com/us/news/technology/coronavirus-raises-fears-of-increase-in-insurance-fraud-231808.aspx

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