North America is the least prepared to fight global insurance fraud – report

North America is the least prepared to fight global insurance fraud – report | Insurance Business America

North America is the least prepared to fight global insurance fraud – report

Anti-insurance fraud efforts in North America are not up to the task of combatting global crime rings, a new report has found.

The report, “Globalization of Insurance Fraud,” was authored by the Coalition Against Insurance Fraud, in partnership with IBM and Luxoft. It surveyed “fraud fighters” – which refers to financial crime experts, data security analysts, government regulators, and insurance professionals – in 33 countries across North America, the Middle East, Europe, Asia, and Africa.

Of the various regions surveyed for the report, the Coalition Against Insurance Fraud found that most fraud fighters – 56.8% – said that they do not have dedicated resources or a fraud department specialized in dealing with globalized fraud. This is especially the case in the North America region, the report noted. On the flip side, it was the EU/UK region that was more likely to have dedicated internal resources to fight global fraud.

According to the Coalition, there were also “preparedness gaps” in planning against coordinated fraud attacks among fraud fighters across the globe. There was a “lack of confidence in the tools, resources and knowledge organizations have in place to combat globalized insurance fraud,” the report noted. Less than half of the survey’s respondents felt “somewhat confident” that their organizations were equipped to address global fraud, while only 4% said they were “extremely confident.”

The report classified “global fraud” as high-tech scams that can be performed remotely over the internet, which can hit targets regardless of their location in the world.

“Organized rings, both foreign and domestic, are stealing billions,” said Coalition Against Insurance Fraud co-chair and Erie Insurance vice president of investigations & internal controls David Rioux. “We’ve seen organized scammers exploit the telehealth system; intercept personal information through phishing scams and other data harvesting schemes; carry out ransomware attacks; and run a number of insurance scams using stolen or synthetic IDs off the dark web. These are all attacks that can be launched from anywhere in the world with a decent internet connection.”

The Coalition also found that most fraud fighters put globalized insurance fraud as a very low priority. Some 27.7% of respondents indicated that global fraud is not a priority, while another 57.5% said it was a low-to-medium priority. This low prioritization has led to a lack of resources and time invested, the group suggested. Of note, North American respondents assigned the lowest priority for global fraud, which reflects a smaller number of companies that underwrite global insurance lines.

But while global fraud was not a high priority among fraud fighters, recent attacks have raised their level of concern. Nearly half of all the respondents (48.5%) said they are either “very concerned” or “extremely concerned” about the future threat of global insurance fraud, particularly as news of recent attacks and cybercrimes make the headlines.

The Coalition has estimated that US insurers and consumers suffer $80 billion in fraud across all lines of insurance each year. Based on the figure, the FBI has projected that the average American family pays between $400 and $700 in additional premiums per year due to fraud.