How does insurance fraud affect consumers? Here are 4 ways to avoid them
The rise of insurance fraud in India is a troubling issue, as innocent policyholders are increasingly falling victim to fraudulent activities. According to Deloitte's Insurance Fraud Survey 2023, the Indian insurance sector has witnessed a substantial surge in fraudulent activities within the life and health insurance domains. Around 60% of respondents noted a significant increase in fraud, with an additional 10% reporting a marginal rise.
Factors contributing to this uptick include increased digitization, remote working in the post-pandemic era, and weakened control measures. These findings emphasise the pressing need for Indian insurers to proactively address fraud risk management through a strategic, technology-driven approach to safeguard their financial integrity and reputation.
Insurance fraud encompasses various deceptive practices, posing a significant threat to both insurers and policyholders. Application fraud, where policyholders lie to get reduced premiums or higher benefits, is frequent. Policyholders or beneficiaries make bogus claims, frequently through fake deaths or planned occurrences. Fraudulent policy changes can occur without the policyholder's awareness. Fraudsters may sell fake insurance plans with tempting bonuses or loans, costing policyholder's money. Insurance fraud, including identity theft, uses personal information for illicit financial transactions, causing financial and psychological harm. Vigilance and strong security are needed to combat insurance fraud.
The Indian insurance industry has witnessed a surge in fraud, particularly in the realms of life and health insurance. Factors such as the digitization of insurance processes, the prevalence of remote work post-pandemic, and
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