Insurance fraud doesn’t always make for the most exciting headlines, but it’s a crime that’s committed daily everywhere in the world. And contrary to a misguided popular view, it’s far from a victimless offense — it has far-reaching implications for consumers, businesses and global markets.
Recently, I had the opportunity to participate in the Global Insurance Fraud Summit (GIFS) in Singapore — joining more than 100 delegates from across the globe who, day in and day out, work to tackle this risk. This preeminent event, now in its sixth year, was held in Asia for the first time, supporting the market’s openness to new perspectives.
Here are some of my observations regarding the challenge of tackling insurance fraud in Asia and a note of some of the latest threats globally.
A noteworthy cultural shift
Earlier this year, I read an article referencing that much of the Asian insurance industry is entangled in reactive processes for tackling fraud, rather than having a cohesive risk framework. But after spending time with delegates from across Asia — Hong Kong, Indonesia, Korea, Malaysia, Singapore and Thailand — I came away from the GIFS with a very different perspective.
Notwithstanding the realities and limitations of national structures, a palatable and defined common denominator has emerged in the Asia market: Insurance fraud is now clearly recognised as a serious concern, and there’s a developing cross-border appetite to do more to tackle it. From ad-hoc coalitions to regional discussions involving insurers and agencies beyond the direct market, collaborative efforts are paving the way towards a platform for effective cross-border strategies — and dynamic deliverables — that are pivotal to addressing the challenges faced. That’s great news for our industry in Asia.
Among Asian underwriters and claims handlers alike, I observed tremendous enthusiasm for and tangible ownership of the problem and commitment to doing something about it. I was especially pleased to see this coming from the top down within some organisations, very much setting the tone for how they want to do business. It can, of course, be overwhelming to understand how to fight back, whether on a local, regional or global basis, but it was uplifting to see a concerted, cultural push for the Asia market to reach a proactive stage by recognising the issue and developing a strategy.
The path forward
Witnessing the passion for tackling the fraud risk in Asia was a source of great personal motivation — and I’m encouraged by the market’s interest in partnership approaches and applying well-established principles and insights to the development of robust anti-fraud strategies. I can vouch for positive steps being taken locally and, increasingly, regionally. But great things take time and effort to accomplish, and we must never forget that Rome wasn’t built in a day.
The value and motivation I’ve taken from the GIFS in Asia continues to fuel my work, and in turn that of my colleagues, as we strengthen Sedgwick’s anti-fraud strategy throughout our nine country locations across the continent.
The latest threats
While the majority of claims are genuine, insurance will always attract those trying to fraudulently beat the system. And the bad actors are taking their efforts across international lines in increasing numbers. It doesn’t take a lot nowadays for both opportunistic and organised insurance fraudsters to get creative with their activities, and more often we’re seeing them playing jeux sans frontieres (games without borders) without too much effort. Some of the stories shared by those at the GIFS were mind-blowing. Cross-border insurance fraud: it’s the challenge to be alive to.
Three other takeaways seemed to resonate universally:
- Everyone is seeing an uptick in opportunistic fraud. All agreed it’s back to pre-pandemic levels, with the correlation between difficult economic conditions and insurance fraud proving to be alive and well. This type of fraud often takes the form of deliberately exaggerated claims, where the challenge is finding the false element in what’s otherwise a genuine loss.
- Organised fraud — which has for so long targeted motor claims, with crash for cash scams and the like — is now expanding into other product lines. For example, embedded insurance schemes are being targeted, with product lines such as accident and health, and travel, featuring prominently.
- The shallow-fake (basic editing) and deep-fake (requiring artificial intelligence) manipulation of documents and photos remains a significant threat. The rising popularity and accessibility of AI tools has opened new doors to opportunities to make fraudulent claims.
Research has shown that doing something to tackle insurance fraud matters a great deal to the majority of consumers. Looking ahead to 2025 and beyond, we can fully expect tackling this risk to remain a critical component of insurers’ risk strategies.
I can say with certainty that attending the GIFS was one of the highlights of my year. Sedgwick will be back next year in Toronto, because this is exactly the type of collaborative forum that’s needed to build momentum.
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For more on the industry trends Sedgwick’s subject-matter experts will be watching in the year ahead, see our Forecasting 2025 report at sedgwick.com/thoughtleadership.
Tags: Asia, Claims, claims fraud, Fraud, fraud claims, fraud strategy, Global, Insurance, Investigation, Investigations, Preserving brands, Risk, Technology, UK, United Kingdom