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The insurance fraud detection market is expected to register a CAGR of over 17.4% during the forecast period (2020-2025).
- Fraudulent claims in the insurance industry have steadily grown to be the single largest expense to property and casualty insurers, taking up to 10% of an insurer’s revenue. In the UK, detected fraud is estimated to be more than EUR 1 billion annually, with undetected fraud adding in excess of EUR 2 billion, according to Marketforce General insurance report 2017 & AInsurance Fraud Taskforce.
- According to Coalition Against Insurance Fraud, in the US fraudulent claims losses from fraudulent claims is estimated to be approximately USD 80 billion a year across all insurance lines. These exorbitant expenses are generally passed on in the form of rising premiums.
- The primary factors driving the growth of the market are the need to oversee tremendous volumes of characters by associations successfully, improving operational proficiency and upgrading the client experience
Scope of the Report
An insurance fraud detection software prevents, detects and manages fraud across the enterprise, making smarter decisions, increasing return on capital and driving business performance.Type of Solutions such as fraud aalytics, authentication, governance, risk and compliance are considered under the scope of the report.
Key Market Trends
Claims Fraud to hold Significant Share
- The decreasing economic growth in developed countries and the slow economic growth, coupled with macroeconomic uncertainty in emerging and third world counties over the past few years have resulted in a marked increase in the amount of insurance fraud being committed.
- For instance, insurers have identified 80 districts across India which have excelled in fraudulent claims over the past decade. They have identified rings that operate with the efficiency of a corporation with well-trained men and women who collect data with the efficiency of a 21st century start-up.
- A combination of poor due diligence in writing policies by insurance companies and the organisational efficiencies of criminals in identifying those who are on deathbed and in enlisting doctors to produce fake certificates led to frauds which are estimated to have cost over INR 10,000 crore annually to the industry in the country.
- A survey by UK comparison website Gocompare.com found that 7% of 18-to-34-year-old UK holidaymakers admitted to exaggerating a claim on their travel insurance policy, or to making up the claim in its entirety. In the UK insurance industry as a whole, the insurers uncovered 350 cases of fraud worth EUR 3.6 million every day, according to the Association of British Insurers (ABI).
- According to the South African Insurance Association, local insurance fraud is in line with international trends and statistics. The association estimates fraudulent claims in South African insurance could amount to as much as 32% of all claims submitted in any year.
North America to Hold Major Share
- North America is anticipated to hold major share in the Insurance fraud detection market. The criminals are looking forward to profit from the people across the region. As most of the people in the region are having health insurance, free medical treatments or complementary consultation offers are being stolen.
- The total cost of P&C insurance fraud is more than USD 80 billion per year in the US alone, according to the Coalition Against Insurance Fraud. Which indicates, on an average insurance fraud costs the average US family between USD 400 and USD 700 per year in the form of increased premiums.
- Such cases of frauds in health insurance are causing damages to the medical history of people. Few years back, it was difficult for the healthcare providers to identify the fraud, as criminals were using all types of patient identifications and insurance information. Due to such frauds, patients are compelled to pay higher premiums.
- The Federal Bureau of Investigation mentioned that healthcare fraud, both private and public, is an estimated 3% - 10%t of total healthcare expenditures. According to U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services’ data, healthcare fraud amounted to between USD 77 billion and USD 259 billion.
- Therefore, the US healthcare department is currently more focused toward the reduction of such cases by implementing the fraud detection technology. Therefore, it is anticipated that owing to the rising fraudulent activities in the US healthcare department, the market studied would witness significant growth over the forecast period.
The insurance fraud detection market comprises several global and regional players, vying for attention in a fairly-contested market space. Although the market studied poses moderately high barriers to entry for new players, several new entrants have been able to gain traction, in the market. The market is also witnessing incraesed competition among the players. The players are focusing on engagimg themselves in several partnerships, mergers and acquisitions and product innovations inorder to gain a competitve advantage.
- September 2019 - FICO extended its product portfolio to AI to fight next generation fraud and financial crime. The FICO Falcon X delivers the radical flexibility needed to counter real-time payment fraud schemes.
- January 2019 - Zurich UK, the UK subsidiary of the global insurance group, extended its 8 year partnerhsip with BAE Systems. BAE Systems will provide Zurich UK with its NetReveal Property & Casualty Fraud solution, for deployment across multiple business areas, including commercial lines, to boost fraud detection, reduce illegitimate payouts and optimise the claims process.
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