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Insurance Fraud Is Evolving and So Must Our Awareness

  • Highlights:

  • Understanding insurance frauds

  • Types of insurance frauds that take place

  • The kind of people who commit frauds

  • How to detect insurance frauds

What is an Insurance Fraud?

Insurance fraud refers to a deliberate deception carried out against or by an insurance company or an agent for personal gains. To put it in simple words, insurance fraud is a situation where an individual lies to their insurer to gain financial or personal benefits. It can be committed through various points in the transaction by the applicants, third-party claimants, policyholders, or professionals who are providing the services. It has been noted that most insurance frauds occur at the time of making a claim.

Some of the common insurance frauds include inflating claims or padding, false representation of facts on the application, staging accidents, and claiming insurance for damage or injuries that didn’t occur.

Types of insurance frauds

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The offering of insurance services online has many benefits in terms of enhancing customer experience, speeding up the process, opening accounts, and submitting claims. However, this also increases the risk of insurance fraud with a reduction in the time available for detecting anomalies. Let’s look at some of the common types of insurance frauds that are carried out.

  1. Account takeover: Fraudsters can take over the insurer or the policyholder's account details through digital channels. Once this is done, they might fill in false insurance claims and account details to gain access to the money.

  2. Changes in payee information: This is one of the most common types of online fraud in today’s time. Payment hijacking is where cybercriminals take over the payment system that is linked to the insurance company to receive the insurance funds.

  3. Synthetic/stolen identities: Very often we have false identities created by fraudsters that they get through stolen personal information. They might combine a false address or date of birth with a falsified identity. This forged identity is then used to apply for insurance policies.

  4. Ghost broking: Some fraudsters buy and forge fake insurance policies and sell them to those looking for insurance policies. The victims of such fraud may not realise they have been scammed until they claim their insurance.

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Who commits insurance fraud?

Insurance frauds are generally committed by three kinds of people:

  • Organized criminals: They steal large sums of money through insurance scams and frauds

  • Ordinary people: People tend to cover the insurance expenses when they file a claim, believing an item to value more than it is

  • Technicians or professionals: They tend to charge inflated service costs and charge for services that were not provided

How to detect insurance fraud?

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Insurance fraud detection is an essential step towards avoiding expensive litigation and losing out on your hard-earned money. A proactive approach towards fraud detection would mean taking up preventive measures and not waiting for fraud to occur. The following signs are key to identifying a fake insurer:

  • Aggressive sales: Agents or brokers that pressurise customers to act immediately are an obvious red flag. An authentic insurer will not place undue pressure on a prospective client

  • Suspicious information: Customers that find it difficult to find an official address or listed phone number should immediately turn sceptical of the legitimacy of the whole activity. Fraudsters tend to cover their tracks with spotty contact information

Stay alert, stay safe from online frauds in India.

Savdhaan Rahein. Safe Rahein.

Bajaj Allianz Life Insurance Company Limited:
• Whistleblower Email: Fraud.Info@bajajallianz.co.in
• Whistleblower Hot Line no: 020- 6728 4477
• Verify your policy: https://bit.ly/bagicpt
• Do’s and Don’t link: https://www.bajajallianzlife.com/content/dam/balic/pdf/Do_s_And_Dont_s.pdf

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