Insurance Fraud Detection Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Insurance Fraud Detection Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The insurance fraud detection market is expected to register a CAGR of over 17.4% during the forecast period. Organizations' adoption of technologies like Big Data, the Internet of Things (IoT), artificial intelligence (AI), and machine learning is transforming business processes continuously and enhancing digital readiness. However, technological development has also made it easier for criminals to attempt cyberattacks and scams for their advantage.

• Fraudulent actions, including conspiracies, theft, money laundering, embezzlement, and extortion, are increasingly essential difficulties for a company in an expanding threat ecology. Insurance fraud cases have gained notoriety globally over the past few years, costing insurance companies billions of dollars. As a result, insurers are adopting cutting-edge automation and analytics solutions as proactive measures to mitigate and reduce losses caused by fraud.
• Fraudulent claims in the insurance industry have steadily grown to be the most significant expense to property and casualty insurers, taking up to 10% of an insurer's revenue. In the UK, detected fraud is estimated to be more than USD 1 billion annually, with undetected fraud adding more than USD 2 billion, according to the Marketforce General insurance report & Insurance Fraud Taskforce.
• According to Coalition Against Insurance Fraud, in the US, fraudulent claims losses from fraudulent claims are estimated to be approximately USD 80 billion a year across all insurance lines. These exorbitant expenses are generally passed on in the form of rising premiums.
• The primary factors driving the market's growth are the need to successfully oversee tremendous volumes of characters by associations, improve operational proficiency, and upgrade the client experience.
• Due to a rise in the frequency of hospitalizations of infected individuals, the COVID-19 pandemic increased insurance claims across the board in several industries, particularly in the healthcare sector. The number of fraudulent claims increased significantly along with the increase in healthcare-related claims. To identify fraudulent claims and stop losses, insurance firms are implementing cutting-edge technologies and using data. To safeguard loyal clients, they also participated in cross-industry anti-fraud cooperation. Several insurance companies implemented digital transformation projects to identify complex and developing fraudulent insurance claim activities.

• The decreasing economic growth in developed countries and the slow economic growth, coupled with macroeconomic uncertainty in emerging and third-world counties over the past few years, have resulted in a marked increase in the amount of insurance fraud committed.
• For instance, insurers have identified 80 districts across India that have excelled in fraudulent claims over the past decade. They have identified rings that operate with the efficiency of a corporation with well-trained men and women who collect data with the efficiency of a 21st-century start-up.
• A combination of poor due diligence in writing policies by insurance companies and the organizational efficiencies of criminals in identifying those who are on deathbeds and in enlisting doctors to produce fake certificates led to frauds estimated to have cost over INR 10,000 crore annually to the industry in the country.
• A survey by UK comparison website Gocompare.com found that 7% of 18-to-34-year-old UK holidaymakers admitted to exaggerating a claim on their travel insurance policy or making up the claim. In the UK insurance industry as a whole, the insurers uncovered 350 cases of fraud worth USD 3.6 million every day, according to the Association of British Insurers (ABI).
• According to the South African Insurance Association, local insurance fraud aligns with international trends and statistics. The association estimates fraudulent claims in South African insurance could amount to as much as 32% of all claims submitted in any year.

• North America is anticipated to hold a major share of the Insurance fraud detection market. The criminals are looking forward to profiting from the people across the region. As most people in the region have health insurance, free medical treatments or complementary consultation offers are being stolen.
• The total cost of P&C insurance fraud is more than USD 80 billion per year in the U.S. alone, according to the Coalition Against Insurance Fraud. This indicates that insurance fraud costs the average U.S. family between USD 400 and USD 700 per year in the form of increased premiums.
• Such cases of fraud in health insurance are causing damage to people's medical history. A few years back, it was difficult for healthcare providers to identify the fraud, as criminals were using all types of patient identifications and insurance information. Due to such frauds, patients are compelled to pay higher premiums.
• The Federal Bureau of Investigation mentioned that private and public healthcare fraud is an estimated 3% - 10%t of total healthcare expenditures. According to the U.S. Department of Health and Human Services Centers for Medicare and Medicaid Services' data, healthcare fraud amounted to between USD 77 billion and USD 259 billion.
• Therefore, the U.S. healthcare department is more focused on reducing such cases by implementing fraud detection technology. Consequently, it is anticipated that owing to the rising fraudulent activities in the U.S. healthcare department, the market studied would witness significant growth over the forecast period.

The insurance fraud detection market comprises several global and regional players vying for attention in a fairly contested market space. Although the market studied poses moderately high barriers to entry for new players, several new entrants have gained traction in the market. The market is also witnessing increased competition among the players. The players focus on engaging themselves in partnerships, mergers, acquisitions, and product innovations to gain a competitive advantage.

In March 2022, a partnership was established between Equifax's analytics and technology business and Truepic, a provenance-based image and video verification provider. Through the association, Truepic Vision, the company's premier digital inspection platform, will be added to Equifax's fraud protection services for its insurance customers, giving real-time transparency and confidence to digital photo and video transactions from anywhere.

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support