Fraud in the Insurance Industry

Fraud is not a new topic in the insurance industry. Much has been said about fraud. Fraud in recent times has become more complex and widespread in a variety of forms. Statistics show that fraud accounts for about 10 percent of the all the total losses recorded in the property industry. In the early 1980s, the insurance industry grew massively to a point where organized crime in the industry surpassed efforts to combat crime as provided for by the antifraud laws and this raised concerns over the spread of fraud (Insurance Information Institute, 2007).

Fraud can be of two types, hard or soft. At the instance where a person tampers with claims or stages an inexistent accident, it amounts to hard fraud. On the other hand, altering the provisions of legitimate complaints to evade payment of taxes or premiums amounts to soft fraud (Wood, 2014). In the insurance industry, fraudsters may range from insurers, policy takers, third-party claimants, consultants as well as the policymakers. One interesting fact from the article was the means by which fraud is propagated.

Usually, fraudsters may overstate the actual figures of the claims, state nonexistent injuries and claims, fail to deliver products and services, stage manages accidents, fake documents, misrepresent data as well as tamper with evidence. Over time, the healthcare, labor unions, as well as the motor industry, have been found to be the most affect industries with insurance fraud.

How fraud is propagated in the present times is quite sophisticated mainly because of the immense influence of technology. While reading through the article, it surprised me to realize the fact that many insurers have adopted the use of antifraud technology primarily meant to evade fraud.

It is impossible for enterprises at present to conduct operations without taking into account measures to mitigate fraud risks. Given this, a good number of businesses have employed predictive modeling (Insurance Information Institute (2007). However, many organizations have not yet adopted the technology while many of them have not found a suitable technology to mitigate fraud losses. The lack of sufficient technique to maintain and cove fraud instances exhaustively is still a gruesome challenge to many organizations.

Keep in mind that even as technology keeps changing, fraud keeps changing and advancing too (Kurvinen, Ilkka & Murthy, 2016). A survey conducted by Property Casualty Insurers Association of America and the FICO shows that about five to ten percent of the total claim costs are enshrined in fraud cases. However, many still believe that fraud cases are more than what the statistics state.

The takeaway message from the article is that fighting insurance fraud is dependent on the weight with which the legislators, regulators and law enforcers place on the fraud mitigation as well as the allocation of the appropriate fraud mitigation resources in the insurance industry. In my opinion, there is need to embrace the new technology moves such as data mining programs to combat fraud. Over 30 percent of the business failures and bankruptcy claims are out of deception (Power & Power, 2015).

When fraud is propagated, everybody suffers. The nation, businesses, retailers, society and innocent people suffer when insurance fraud is spread. When insurance companies pass the cost of fraud to a policyholder, premiums rise thereby hurting consumers. The exciting bit is that data analysis is only able to flag cases but cannot prove fraud.

Increased surveillance, stakeouts as well as the social media can help spot and unearth fraudsters. In severe cases, hands-on investigations especially private investigation be used. The management should improve on the method of collection of data and ensure that it only collects quality information.

Robust anti-fraud processes and procedures should be incorporated as part of the risk management strategies adopted by the company (Kenyon & Eloff, 2017). Ethical standards should be utilized in the organization. It starts with the top management and trickles down to the middle and junior level management.


  • Insurance Information Institute (2007, November 6). Background on: Insurance Fraud. Retrieved from Accessed on [4 Feb, 2018].
  • Kenyon, D., & Eloff, J. H. P. (2017, August). Big data science for predicting insurance claims
  • Kurvinen, M., Ilkka, T. Ã., & Murthy, D. P. (2016). Warranty fraud management: reducing fraud and other excess costs in warranty and service operations. John Wiley & Sons.
  • Power, D. J., & Power, M. L. (2015, May). Sharing and Analyzing Data to Reduce Insurance Fraud. In Proceedings of the 10th Annual MWAIS Conference (MWAIS 2015), Pittsburg, KS, USA.
  • Wood, S. (2014). Fraud Facts: The real cost of insurance fraud – and what we can do.[online]. Retrieved from [Feb 5, 2018].

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with MyhomeworkGeeks
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Thank you for your hard work and help.
Customer 452773, February 13th, 2023
Thank you!
Customer 452545, February 6th, 2021
Business and administrative studies
excellent work
Customer 452773, March 12th, 2023
Great job
Customer 452773, February 13th, 2023
Leadership Studies
excellent job
Customer 452773, July 28th, 2023
excellent work
Customer 452773, October 6th, 2023
Business and administrative studies
Thank you for your hard work and effort. Made a 96 out of 125 points Lacked information from the rubic
Customer 452773, October 27th, 2023
excellent work
Customer 452773, March 1st, 2024
Leadership Studies
awesome work as always
Customer 452773, August 19th, 2023
The support team was late responding , my paper was late because the support team didn't respond in a timely manner. The writer of the paper finally got it right but seems there was a problem getting the revisioin to me.
Customer 452773, April 7th, 2024
English 101
great summery in terms of the time given. it lacks a bit of clarity but otherwise perfect.
Customer 452747, June 9th, 2021
Impressive writing
Customer 452547, February 6th, 2021
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat

Sometimes it is hard to do all the work on your own

Let us help you get a good grade on your paper. Get professional help and free up your time for more important courses. Let us handle your;

  • Dissertations and Thesis
  • Essays
  • All Assignments

  • Research papers
  • Terms Papers
  • Online Classes
Live ChatWhatsApp