The insurance sector hit by the rise in digital fraud in the first half of 2022

The rate of suspected global digital fraud attempts in the insurance industry saw the largest year-over-year increase, rising 159% between the second quarter of 2021 and the second quarter of 2022, according to a report by Trans Union.

TransUnion reviewed information from billions of transactions and more than 40,000 websites and apps contained in the TransUnion Identity Verification Suite.

The research showed that while there was a 14% global drop in suspected digital fraud attempts across all sectors, the insurance and logistics sectors saw the biggest increase.

First-party demand fraud in the insurance industry was the top insurance-focused fraud activity recorded.

This type of fraud involves fraudulent claims containing intentionally inaccurate or manipulated information provided by the policyholder with the intention of receiving certification, lower rates or better terms for a policy/contract.

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The report also states that other industries that saw the largest declines in the rate of suspected digital fraudulent activity over the forecast period include gaming, travel and leisure, and retail.

Shai Cohen, senior vice president of global fraud solutions at TransUnion, said, “We saw some interesting trends in the first half of 2022, with suspected fraudulent activity in the insurance industry continuing to be elevated in during the first six months of the year.

“In recent years, we have seen fraudsters change direction every quarter. At present, we believe the insurance industry is experiencing more “soft fraud” as some consumers may misrepresent their policies in an effort to save money, especially in a high risk environment. inflation which puts increased pressure on their portfolio. »

This report shows how vulnerable insurers, and therefore reinsurers, are to fraud and how this problem could become another potential source of claims inflation.

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