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increase in incidence of frauds. The reports also suggest that

over the last five years the number of reported incidences of

fraud in India’s life insurance market has gone up by 103% while

General Insurance losses have risen by around 70%. These figures

display a worrying trend and indicate the need for greater fraud

control mechanisms.

Frauds in insurance are typically where a fraudster tries to gain

undue benefit from the insurance by ignorance or by willful

manipulation.

Insurance fraud and, more generally, abuse of insurance not

only puts the profitability of the insurer at risk, but also

negatively affect its value chain, which is the insurance

industry, and hence is extremely detrimental to established

social and economic structures. They are believed to materially

escalate the cost of certain types of insurance (e.g. automobile,

fire and health insurance). Eventually, this vicious cycle of fraud

– mounting losses and rising premiums form a threat to the very

principle of solidarity that keeps the concept of insurance as

well as the insurance industry alive.

Historically, it has been seen around the globe, that any major

financial crash or economic recession leads to even honest

policy holders trying to make a fast buck by lodging a wrong

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