Nearly 60% of those tasked with thwarting the multibillion-dollar threat posed by global criminal networks are not yet up to the task, reports a study by the Coalition Against Insurance Fraud, IBM and Luxoft.
The study interviewed financial crime experts, data security analysts, government regulators, insurance professionals and others to better understand how anti-fraud experts around the world deal with international fraud networks.
Research found that fraud fighters – professionals tasked with investigating and prosecuting insurance fraud – in North America were the least prepared for threats from abroad.
“Organized networks, both foreign and domestic, are stealing billions,” said coalition co-chair David Rioux of Erie Insurance.
âWe have seen organized crooks exploit the telehealth system; intercept personal information through phishing scams and other data collection programs; carry out ransomware attacks; and run a number of insurance scams using stolen or man-made credentials on the dark web. These are all attacks that can be launched from anywhere in the world with a decent internet connection. “
Key points to remember
- Anti-fraud must prepare for the present to tackle global fraud in the future. Global insurance fraud is not a priority at all for 27.7% of respondents and a low to medium priority for 57.5% of respondents, resulting in a lack of resources and time invested in day-to-day operations in the fight against global insurance fraud. Respondents from North America assign a lower priority to global fraud, reflecting a smaller number of companies that underwrite global lines of insurance.
- Recent attacks make threat of global insurance fraud hard to ignore. Advances in technology, recent attacks by individuals and groups in the news, as well as the cybercrime attack could increase the overall level of concern. 48.5% of respondents say they are either “very concerned” or “extremely concerned” about the future threat of global insurance fraud.
- Greater investment in anti-fraud technology and personnel needed to tackle threat from global insurance scammers. 56.8% of fraud fighters said they did not have dedicated resources or an anti-fraud service specializing in tackling globalized fraud, especially in North America. The EU / UK were more likely to have internal resources dedicated to tackling global fraud. More than half of those surveyed said technology was either a component (41.3%) or the primary method (11.06%) by which their organization identifies, tracks and responds to global fraud. The study found that organizations that have both a dedicated program and resources are using technology more often.
The study interviewed fraud fighters living in 33 countries in North America, the Middle East, Europe, Asia and Africa.
Estimating the cost of insurance fraud around the world
Although there is no single estimate of the annual cost of insurance fraud worldwide, a report from Insurance Europe estimated that there were â¬ 13 billion in fraudulent claims in the world. ‘EU in 2017. Fraud accounted for around 10% of the damage (PC) losses suffered by the insurance industry and claims settlement costs each year, or $ 38 billion in 2020.
US insurers and consumers experience $ 80 billion in fraud annually across all lines of insurance. The FBI estimates that it costs the average American family between $ 400 and $ 700 in increased premiums per year.
The investigation also identified gaps in preparedness for planning coordinated fraud attacks originating from abroad. “There is a lack of confidence in the tools, resources and knowledge available to organizations to tackle global insurance fraud,” one of the main findings of the study reads. Less than half of those surveyed globally felt that even “somewhat confident” that their organizations are equipped to tackle global fraud, compared to 4% who are “extremely confident” that their team is ready for the challenge ahead .
âThe risk is real. The time to act is not tomorrow, but today, âthe study concludes in an industry-wide call to action to: conduct further research on the globalization of fraud insurance; invest more in AI, data analytics and emerging technologies in the area of ââfraud detection; promote knowledge sharing among fraud fighters; and conduct threat analyzes and develop internal plans and procedures to guard against global insurance fraud.