Optima Insurance Brokers Pvt. Ltd.


Our views on important risk issues and emerging risks.

Insurers lose 6% of revenue to fraud each year

June 19, 2015

Non-life insurance companies in India lose approximately 6% of their revenue annually due to fraud, according to Mr Sanjiv Kumar Dwivedi, Vice President of fraud prevention and loss mitigation at Bajaj Allianz General Insurance. To stem such malpractices, non-life insurers are taking action. .

General insurance companies have been facing several suspicious claims, that include fake hospital bills, exaggerated claims and even fraudulent pathology lab reports, reported Business Standard. Mr KK Mishra, Managing Director and CEO of Tata AIG General Insurance, said that steps are being taken to build up a data bank of hospitals by the insurance industry and the Insurance Information Bureau of India to identify all hospitals across the country. .

He said that with numerous hospitals all across the country charging different rates, there are people who are out to make a quick buck through buying insurance. Mr Mishra said that Tata AIG General Insurance looks into the operating costs in a standard hospital. If an individual presents a much higher bill from an unknown place contrary to what is usually charged, the company will investigate the case. Mr Sanjay Datta, Head of underwriting and claims at ICICI Lombard General Insurance, said that non-life insurers also look carefully at regions where there have been past instances of fraud. “There are several pockets where such instances take place,” he said, adding that the incidence of fraud is higher in health and motor insurance.. .

Claims investigation teams in insurance companies are also getting sophisticated with insurers like Bajaj Allianz hiring forensic specialists and investigators, and medical officers in their teams. A study by the international consulting firm Accenture has found that 24% of respondents think that it is perfectly normal to overstate claim amounts. 11% of people with insurance feel that fabrication is also fine. Almost 92% of the people surveyed claimed they have come across fraud in some form or another. Insurers need improved legislation to combat fraud. Mr Mishra pointed out that currently, the Code of Criminal Procedure does not contain a provision which classifies insurance fraud as a criminal offence. The general insurance industry in India reported total premiums of INR847.15 billion (US$13.4 billion) for the financial year ended 31 March 2015.

Optima’s core group has more than 100 man-years of experience in insurance. Our experience has trained us in reading the fine print of insurance policies, understanding it and applying it for the benefit of our clients.

  • Follow Us:  

Corporate Office

M6, M Block Market, Greater Kailash-II, New Delhi-110 048
+91-11-40 50 51 52, +91-11-40 50 51 53

Registered Office

M4, Greater Kailash-II, New Delhi-100 048

IRDA Registration Number 326  |  CIN : U66030DL2000PTC103603  |  Category : Direct Broker (Life and Non-Life)  |  License period : 22-03-21 to 21-03-24
© 2024 Copyrights, Optima Insurance Brokers Pvt. Ltd.