Insurers, up against fraud

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Fraud runs deep and wide because the insured are not the only cheaters. This plague is everywhere, straining all the insurance chain, from underwriting all the way to the occurrence of the claim. All the stakeholders may, at one level or another, get involved: insured, repair garages, assessors, auto-repairers, doctors, lawyers, insurance agents and event wage earners within insurance companies.

Small but still fraudulent acts may be a policyholder who, for the sake of some meager saving, would intentionally fill out an insurance application minimizing the sums insured. As much trivial as it can be, this kind of act is unlawful in view of the insurance code. It may be likened to changing the label of a product or lying about its weight before bringing it to the cashier.

Unfortunately, fraud is not confined to a few lies or forged documents. It is much harder to counter when it is committed by professionals who conduct themselves in the fashion of “organized gangs”: networks for car robbery, fraud at the cash desks of health insurance offices, criminal acts, identity theft, and the list of swindle practices in insurance is very long.

It is wrong to believe that insurance fraud does not cause victims. The insured are the first and hardest hit. They are the ones who, ultimately, bear the billions of dollars unduly disbursed by insurance companies. Contrarily to the generally-perceived ideas, it is not the insurers who pay the claims but quite surely the insured; with insurers being just the organizers and managers of the mutual system of insurance.

Atlas Magazine N°141, May 2017 [1]