Insurance fraud impacts every consumer and taxpayer. The global insurance industry comprises thousands of companies and collects trillions of dollars in premiums annually, both of which make it an attractive target for fraud. So too does the fact that insurance fraud currently sees low levels of detection and prosecution.
Insurance fraud in North America, specifically property & casualty (P&C) and life insurance, is currently estimated to exceed US$40 billion annually. While P&C insurance fraud receives the most attention in terms of frequency and media visibility, U.S. healthcare fraud is estimated to total as much as US$115 billion each year. Life insurance fraud frequently involves organized groups of dishonest insurance agents and elaborate schemes that run into the tens―and even hundreds―of millions of dollars in losses. Although auto and property claims counts have declined approximately 2%, the number of questionable P&C claims has risen more than 33% since 2008. Claims fraud in the P&C insurance industry alone is conservatively estimated to cost US $30 billion annually, with workers’ compensation and auto insurance fraud leading the way. Detecting and deterring fraud consistently ranks among the top three investment and strategic priorities for P&C insurance industry executives.
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