A research project entitled “Identifying Policyholders’ Fraud Techniques against the Insurer in Life Insurances in Iran and Selected Countries” attempts to identify the insured’s fraud techniques and provides a statistical analysis of the fraud cases in order to detect more details about such techniques.
Given that the fraud instance classifications do not merely apply to life insurance neither in local nor global level, developing classifications of the instances and policyholder fraud techniques in all types of life insurances are among other major purposes of this research, according to PRIAO, IRC.
Employing fraud detection techniques in order to prevent fraud occurrence in insurance systems is a necessary endeavor. In other words, this not only reduces insurers’ operational costs, it also gains the trust of other policyholders and promotes the insurers’ market share as a reliable financial service provider.
In this project, initially the policyholders’ fraud against the insurer has been reviewed with the latest literature. Then, performing a framework analysis, the fraud instances and techniques in selected insurance companies have been delineated. Finally, with the help of the selected companies’ statistical data pertaining to fraud cases, other details have been explored.
According to the research findings, policy purchase after incurred loss or death are amongst the most common instances of fraud; 82% of the identified frauds in life insurances fall in this category. Among this fraud category, the most common technique is buying policy after a special disease is diagnosed.
According to this report, in fraud instances of the policy purchase after incurred loss or death, 72% of the fraudulent policyholders were man and their average age was 47. In other fraud instances, 75% of the fraudulent policyholders were man and their average age was 44.
In all types of the frauds, 86 percent of the policyholders were unemployed and only 14% had a job.
In fulfilling the objectives of this study, the fraud instances for money laundering and illegal income laundering, claiming for loss under fake coverages, claiming for fake or intentional disabilities, falsifying medical records, signature forgery, lying about income or occupation, policy purchase after being infected with a special disease, and policy purchase after incurred death due to accident. In this classification, with the help of developing an information system, the latest list of fraud instances are reported to the insurance industry in an online set-up by which the insurers will be able to prevent, identify, and control similar instances of policyholders’ frauds.
The Persian full text of the research report is available at this link.