By Max Dorfman, Research Writer, Triple-I
Insurance fraud costs US$308.6 billion per year, according to recent research from the Coalition Against Insurance Fraud (CAIF). And while staffing in insurers̵
7; special investigation units (SIUs) is a pain point, CAIF found that the use of anti-fraud technology is increasing.CAIF notes that the most severely affected lines of insurance are:
- Life insurance, at $74.7 billion annually;
- Medicare and Medicaid, at $68.7 billion; and
- Property and damage, $45 billion.
“There is an enormous and monumental impact that insurance fraud causes American citizens, American families and our economy every year,” said Matthew Smith, the coalition’s executive director.
Another recent CAIF study looked at SIUs and insurance companies’ responses to fraud. The study found that the SIU workforce grew by 1.4 percent from 2021 to 2022, slower than the 2.5 percent growth rate from two previous studies that addressed this issue. Staffing and talent are among the top concerns among anti-fraud leaders CAIF surveyed.
However, a further CAIF study found that anti-fraud technology is increasingly being used – a positive sign in the fight against these crimes. Among the key findings in that report is that 80 percent of respondents use predictive modeling to detect fraud, up from 55 percent in 2018.
Insurance fraud is not a victimless crime. According to the FBI, the average American family spends an additional $400 to $700 on premiums each year due to fraud. Most of these costs stem from common fraud, including inflating actual claims; misrepresentation of facts in an insurance application; file claims for injuries or damages that never occurred; and staging accidents.
To further combat insurance fraud, there are ways to file complaints, including contacting your state’s fraud bureau; contact your insurer to see if a fraud system is in place; using the National Insurance Crime Bureau (NICB) ‘Report Fraud’ button; and report it to a local FBI office.
“Insurance fraud is the crime we all pay for,” CAIF’s Smith added. “Ultimately, it is American policyholders and consumers who pay the high costs of insurance fraud.”
Read more:
Fraud, litigation push Florida’s insurance market to the brink of collapse
Study: Insurance companies suspect increase in fraudulent claims since pandemic began
The fight against Deepfake threats
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