Insufficient risk management barrier to insurance fraud detection: IAIS

Barriers to addressing insurance fraud include insufficient risk management, commercial interests and public attitudes about fraud, according to findings in Report on the survey on preventing, detecting and remedying fraud in insurance, issued by the International Association of Insurance Supervisors (IAIS).
On the last [survey] question [of more than 100 respondents], on the problems that are encountered in the battle against fraud, respondents noted 234 issues, the paper concludes.
Most of the problems have to do with inadequate risk management (34%). This category deals with different aspects of the risk management system: priority at board level, culture, an effective anti-fraud policy, fraud awareness, knowledge and training and internal control and internal audit.
Other significant problem categories are ineffective regulation (provability and privacy law) and law enforcement (priority and capacity) (22%) and information sharing and cooperation (between insurers and between insurers and law enforcement and internationally) (15%).
Public attitude (fraud as a victimless crime), commercial interests (prevailing above fraud prevention and detection) and opportunities related to the characteristics of insurance products (based on trust) and technology form the other categories, representing 14%, 8% and 7% respectively of the answers.
In a press release, the IAIS says its most recent report builds on a report issued last year, entitled Guidance paper on preventing, detecting and remedying fraud in insurance, published by the IAIS Insurance Fraud Subcommittee (IFS).
The IFS undertook the research in an effort to address risk management and help to prevent, detect and mediate potential fraud risk.
After the first IFS report was released, a follow-up survey was sent out to members and observers of the IAIS, in addition to members of the International Association of Insurance Fraud Agencies (IAIFA).
The latest report analyzes the results of the follow-up questionnaire.
The report provides a positive contribution to the guidance paper, according to IFS chair Peter van den Broeke. It supplemented the paper with additional fraud indicators and anti-fraud measures and, most importantly, by corroborating the initial findings of the research. The report also gives a broad overview of the current problems that the insurance industry and the supervisors experience in the battle against fraud.