Insurance Fraud has become a matter of grave concern in Europe. According to Insurance Europe, the European (re)insurance federation, the total from all cases of fraud – both detected and undetected – amounts to 10 percent of overall claims expenditure in Europe.
According to McKinsey, common pitfalls in Fraud Management are:
- Not in the focus of top management
- Limited importance of fraud in operational claims processing
- Insufficient specialization
- Hardly any modern investigation methods
- IT systems that are obsolete or have not been maintained
Insurance companies need to act fast to realize this untapped potential from optimized fraud management as well as to reduce a potential competitive disadvantage compared to other insurers. This can be done in two stages:
- Putting fraud management on a more professional footing
- Rallying forces to fight organized fraud
The insurance industry, as a whole, needs to tackle these fraudsters for the interest of all market participants. To know more, read the following article by Thomas Kuhnt, Johannes-Tobias Lorenz, and Michael Müssig at mckinsey.com: