Insurance Fraud

Fraud against insurers takes several forms. Policyholders may exaggerate a claim, stage an accident or invent a loss. Applicants may lie about age, health or driving history to pay a lower premium, which is underwriting fraud. Agents and brokers may collect premiums and keep them, issue fake policies or sell products through misleading statements. Medical providers may bill for treatment never given, and employees may collude with outsiders to approve claims. Organised rings run staged crashes or fake injury claims at scale. Insurers use claims analytics, red flag lists, shared industry databases, special investigation units and policy conditions that void cover for fraud. Higher premiums for honest policyholders are the visible cost, which is why insurers share data and run dedicated investigation units.

After a minor car collision, a policyholder claims for a whiplash injury and an expensive repair. The insurer's analytics notice that the same garage, clinic and lawyer appear in several recent claims with similar descriptions. The special investigation unit interviews the parties and finds the collision was arranged. The claim is declined, the policy is cancelled and the case is passed to the police.