Page 39 - Insurance Times July 2023

Measure to

prevent

Insurance Fraud

Gopal Balachandran
CFO & CRO
ICICI Lombard GIC Ltd

Insurance companies have been impacted by fraudulent activities, suffering financial losses as a
result. Most industry experts believe that fraud exists anywhere between 10-15% and they are being
discovered across lines of business.

Q: How serious is the fraud in the patient department, formation of fake Small & Medium
Enterprises (SME) entities for the purpose of Insurance claims
Insurance sector?
etc.
Response:
In Personal accident claims we observe frauds on account of
Insurance companies have been impacted by fraudulent forged and or fabricated Police records, medical records for
activities, suffering financial losses as a result. Most industry cause of death including post-mortem reports, forged
experts believe that fraud exists anywhere between 10-15% treatment records for disability and on account of
and they are being discovered across lines of business. misrepresentation of facts around the cause of death to get
benefit of Insurance.
The Insurance Regulatory and Development Authority of India
(IRDAI)sets out 3 broad categories of fraud -Policyholder Fraud We also observe fraud on account of dishonesty of employees
and/or Claims Fraud, Intermediary Fraud and Internal Fraud. or intermediary in form of premium siphoning or fake/ forged
reimbursement claims, claims fraud, issuance of fake policy
It has been observed that in motor claims; motor OD/ theft/
by external entities.
personal accident/ third party frauds occur on account of
misrepresentation of facts, fabrication of documents and or
Q: What step companies are taking to
implantation of driver or vehicle to get undue gain from
Insurance Company. stop this?
In property claims we observe misrepresentation of quantity Response:
and quality of material lost or destroyed. Arson is represented IRDAI in its circular dated January 2013 introduced the
as fire loss. "Insurance Fraud Monitoring Framework". All Insurance
Companies are required to put in place an 'Anti-Fraud Policy'
In health indemnity, we observe frauds on account of fake/
which would categorize various types of frauds
fabricated treatment records, fabrication of bills/ medical
documents, misrepresentation of facts like increase in length ICICI Lombard has invested in loss minimization to design
of stay, outdoor patient treatment converted to indoor process and system to prevent occurrence of frauds in line

The Insurance Times July 2023 35