A survey of claims professionals from around the world, conducted by the Reinsurance Group of America (RGA), has found that claims fraud in 2023 was the same or increased relative to prior years. Broken down, 35 per cent of the company’s claims specialist panelists surveyed said fraud increased during the year while 39 per cent reported no change in fraud levels.
Focused on life and health insurance claims, the company asked panelists who is most likely to commit fraud: 72 per cent listed consumers first (examples include misrepresentation, non-disclosure, falsifying documents and working while claiming disability benefits, the report’s authors note), 41 per cent noted agents as likely culprits, followed by 23 per cent who say doctor-related fraud is a concern.
Agent-related cases
Regarding agents, the report states that cases can include coaching policyholders on claim responses, validating fraudulent documents and not properly screening clients.
“Just more than 50 per cent of respondents believe that life (mortality) products remain most vulnerable to fraud. Health (medical) ranks a distant second by nearly half (27 per cent). Critical illness is listed third (nine per cent), although this is more than double the percent of our previous survey,” they write.
The report also looks at average claim times, noting that these tend to be about three weeks, jumping to “an alarming” 68 days when fraudulent activity is suspected.
Interestingly, the insurers’ representatives say they will prefer to decline a claim based on non-fraud factors. “The survey shows 72 per cent of respondents will always or sometimes deny a claim for a reason other than fraud, even though there is evidence to support a fraud allegation,” they note. This occurs because there can be challenges associated with proving fraud, lack of evidence, reputational risks and overall cost/benefit analyses which suggest that the time and effort required to pursue fraud claims outweigh the value of taking action.
It’s estimated by the company that fraud impacts approximately one out of every 30 claims. In the global survey of 83 claims experts, 78 per cent said their companies had dedicated investigative teams or persons and 82 per cent reported having training designed to help claims assessors recognise potential fraudulent acts.
Artificial intelligence
The report also discusses artificial intelligence (AI), noting that AI empowers fraudsters but is also required to fight them. “Invest in new technology to combat fraud, enabling the industry to keep pace with fraudsters,” the report recommends. The reinsurer also suggests companies establish dedicated fraud prevention teams, provide fraud recognition training and always refer criminal fraud to the appropriate authorities.
