The Insurance Information Bureau (IIB) of IRDAI is preparing to go live with ‘Beema Satark’ a B2B platform, to alert the general and standalone health Insurers about fraudulent medical insurance cases. All insurance companies will be able to exchange information and gain from this fraud analytics platform of the Indian general insurance industry. It will start with health insurance claims and add motor insurance claims later.
Insurance frauds are on the rise
As per a survey, about 60% of Indian private insurers think that frauds in the life and health insurance are rising significantly, while a minority of 10% think it increased marginally. This survey of insurance frauds was conducted in July-September 2022, with top level management responsible for compliance in leading private Indian insurers.
Frauds are on the rise owing to a higher level of digitization, post-COVID working from remote, and weakening of controls. Data theft is emerging as a big risk while traditional frauds like collusion between third parties and insurance mis-selling continues.
About 40% of the participants across the life and health insurance segments highlighted Fraud Mitigation as the top most priority for the Board and management.
The survey noted that there is an urgent need for Indian insurers to work pro-actively for Fraud risk management framework. Strategic intervention from top decision-makers to mitigate frauds is essential by reviewing and constantly monitoring the insurer’s operational model.