Page 30 - Insurance Times July 2021

1) Business risk D) Insurance Fraud Controls through Fraud
2) Financial risk Response:
3) Environmental risk Following fraud response steps helps an insurance company
4) IT and Data risk to control frauds
1) Purpose:
Fraud Indicators: Fraud Alerts The fraud response plan is an official means of setting down
Y Fraud alerts have been described as specific events or clearly the measures which are in place for dealing with
red flags, which may be indicative of fraud. Some of detected or suspected cases of fraud.
these Red Flags are as follows: It is planned to provide measures which allow for evidence
o Unidentified emails/letters/telephone calls. gathering and collation in a manner which will simplify
o Emails sent at uncommon times, with needless informed decision-making, while safeguarding that evidence
attachments, or to unfamiliar end-points. gathered will be permissible in the event of any civil or
o Discrepancy between earnings and lifestyle. criminal action.
o Supplies purchased in excess of need.
2) Policy:
o Higher than average number of failed login The fraud response plan should repeat the organization's
attempts.
commitment to high legal, ethical and moral standards in all
Tools & Techniques for Fraud Detection: its actions and its approach to dealing with those who fail to
meet those standards. It is important that all those working
1) Background Reading in the organization are aware of the risk of fraud and other
o To keep up to date with fraud inclinations and illegal acts, such as dishonesty or damage to property.
matters.
Organizations should be clear about the means of enforcing
o The Internet is also a treasured, and gigantic, the rules or controls which the organization has in place to
research tool.
counter such risks and be aware of how to report any
2) Benchmarking suspicions they may have.
Comparisons of one financial period with another; or
the performance of one cost centre, or business unit, 3) Roles and Responsibilities:
with another; or of overall business performance with The division of responsibilities for fraud risk management will
industry standards, can highlight anomalies worthy of vary from one organization to the next, depending on the
further investigation. size, industry, culture and other factors.

3) Risk Management Process However, the same should be documented and should made
To detect, analyze, evaluate, treat, monitor frauds. available public in the company.

4) Systems Analysis
It is significant to inspect the systems in place and
identify any weaknesses that could be chances for the
impostor.
5) Specialist Software
Such as audit tools for data identical analysis can
substantiate very useful. Additional tools allow for
examination such as real time transaction assessment,
targeted post-transactional review, or strategic
investigation of management accounts.

6) Exception Reporting
Many organizations can generate automatic reports for
results that fall outside of pre-arranged threshold values
(exceptions), allowing instant identification of results
differing from the standard.

30 The Insurance Times, July 2021