Insurance Fraud Rises Along With Carriers’ Workload
As with most troubling developments, the pandemic has accelerated insurance fraud trends as pressures from economic uncertainty moves individuals and businesses to act less than ethical at a time when carriers are facing a slew of challenges from COVID-19.
Although 10% is the industry standard assumption for the number of claims that have an element of fraud, this year responses averaged 18%, according to fraud detection and risk assessment software provider FRISS Fraudebestrijding B.V.’s 2020 Insurance Fraud Report survey.
In addition to increased instances of fraud, insurers have seen a 75% uptick in workload since the pandemic, the report noted.
“The increase in workload was about getting people used to working from home, which was new for most employees,” Jeroen Morrenhof, CEO and co-founder of FRISS, said during a webinar debriefing on the report.
He went on to explain that since remote work has become the norm, carriers have been forced to make fewer inspections. In turn, insurers are seeing upticks in suspected and proven fraud.