With Thompson’s World Insurance News reporting (May 5, 2014) that Aviva detected over C$202.84m in insurance fraud in 2013–a 19% increase over 2012–over 45 claims a day (C$553,370) it is clear that one of the world’s oldest professions must be taken increasingly seriously by insurance claims executives.
Fraudsters have historically viewed insurance fraud as a relatively low risk way of building a career in criminality. Fearful of investigation and defense costs, and of punitive damages verdicts where a defense does not succeed, many insurers have often paid claims they believe to be fraudulent. It is hard to scope out the true cost of fraud unless adequate resources are devoted to the task: you don’t find what you do not actively and aggressively pursue.
With Insurance Bureau of Canada estimates of insurance fraud in Canada north of $500 million a year, the cost of inaction is clear. Cost/Benefit analyses solely focused on a case by case assessment often fail to take into account for the far greater aggregate costs of maintaining a passive system of non-deterrence.
Insurance Executives concerned for the bottom line and the long run prosperity of their company and the insurance industry as a whole will want to ensure they have the systems in place to detect and respond to fraudulent insurance claims.
If you require advice on fraudulent insurance claims, ranging from the exaggeration of actual claims or arising from an entirely invented loss or accident, contact us for an initial consultation.