In tough times Fraud events increase

Soul Abraham, Chief Executive for Retail at Old Mutual Insure, talks about the escalating threat of insurance fraud amid economic challenges.

Abraham elucidates insurance fraud as the deliberate misrepresentation to insurers for personal gain, attributing its increase to economic downturns. As disposable income shrinks, fraudulent activities surge, necessitating intensified efforts from insurers to combat fraud effectively.

He underscores the adverse impact of fraud on customer experience and premium rates, prompting Old Mutual Insure to enhance fraud detection mechanisms. Abraham discusses the integration of advanced analytics and AI-driven fraud models to scrutinize claims thoroughly. Additionally, the implementation of voice analytics technology aids in identifying deceptive claims.

Abraham emphasizes the collaboration between insurers and brokers in thwarting fraudulent activities, urging brokers to remain vigilant and report suspicious claims promptly.He acknowledges the collective responsibility in curbing fraud for the benefit of all clients. Abraham concludes by commending the concerted efforts invested in combating fraud, acknowledging the ongoing challenges and the importance of sustained vigilance.

Highlights

1. Factors Contributing to Fraud: Economic downturns lead to increased fraud, as seen in times of global and local economic difficulties. Abraham notes that crime rates rise during such periods, affecting various sectors, including insurance.
2. Impact on Insurance Industry: The rise in fraud necessitates increased efforts from insurance companies to weed out fraudulent claims. This affects customer experience and can lead to higher premiums for all customers.
3. Response Strategies: Old Mutual Insure employs advanced analytics and AI-driven fraud models to detect fraudulent claims. They also use voice analytics technology to assess the legitimacy of claims through conversations with customers.
4. Collaboration with Brokers: Brokers play a crucial role in detecting fraudulent activities and reporting suspicious claims. Abraham emphasizes the importance of transparency and communication between insurers and brokers to combat fraud effectively.
5. Consequences for Perpetrators: Perpetrators of insurance fraud face severe consequences, including being blacklisted and impacting their financial standing, such as credit scores and insurability.
6. Countermeasures: Abraham underscores the importance of collaboration within the insurance industry to prevent fraud. This involves continuous improvement of fraud detection methods and close cooperation between insurers, brokers, and clients.

Overall, the interview highlights the challenges posed by rising insurance fraud, the strategies employed by insurers to mitigate it, and the importance of collective action in safeguarding the integrity of the insurance industry.

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