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60 percent Indian insurers see a rapid rise in fraud: Deloitte survey

National, 16 February 2023: Insurance companies in India have experienced a rise in fraud instances, within the life and health insurance categories, according to Deloitte’s Insurance Fraud Survey 2023.

About 60 percent of survey respondents believe that there has been a significant rise in fraud, while further 10 percent experienced a marginal increase. Insurers consider mitigating fraud as a priority. Only 60 percent of respondents plan to increase their budgets marginally and the remaining investments would remain at the same level as the past year.

Some key factors contributing to frauds include increased digitisation (34 percent), remote working (22 percent) post pandemic and weakened controls (22 percent).

Technology-led innovation in the insurance sector has brought agility, speed, superior customer experience, and ease of use. However, it has led to vulnerabilities and risks in the overall ecosystem. New fraud trends, such as data theft emerge in the insurance segment, and traditional frauds, such as collusion between third parties and mis-selling of insurance products continue to prevail and are still a concern for the sector.

Data related sensitivities have amplified within the sector. Seventy percent respondents indicate data-quality issues as a common challenge amongst life and health insurance frauds. Sixty percent respondents faced challenges related to data protection and privacy.

In addition, 40 percent of respondents across life and health insurance segments indicated fraud mitigation as one of the most important priorities for the Board and management, while the remaining highlighted it as one of the several key priorities.

Sanjoy Datta, Partner and Financial Services leader, Deloitte India said, “Globally, insurance companies have acknowledged that fraudulent activities lead to both financial and reputational loss.

Mitigating fraud needs strategic intervention and an appropriate tone at the top; decision makers must relook into the insurer’s operations model and introduce ways to monitor it periodically. The Indian insurance sector is at the cusp of a digital revolution and like any other sector it is compelled to re-invent itself to introduce faster business operations, customer acquisition, and experience with the power of technology.

As risks lurk, there is an immediate need for Indian insurers to consider a proactive fraud risk management framework. This is needed as strategic direction, culture, collaboration, coupled with board-level oversight can set the right direction for organisations to fight the challenges consequent to increased use of technology and digitalisation”.

K V Karthik, Partner, Forensics, Financial Advisory, Deloitte India said,
“An interesting insight from the survey pointed to the weakness in controls to prevent/detect frauds as one of the reasons for increased fraud incidents.

Introduction of new technology, changes in ways of working, especially in light of the pandemic, may have resulted in the weakening of controls over time which provides an opportunity to the fraudsters to exploit the loopholes in the system.

With frauds becoming a board-level agenda and digital boundaries constantly blurring, there is a clear need for insurers to relook at their operating model that integrates a larger agenda, which will work across business, compliance, legal, underwriting, and operations departments.”

Other key highlights from the survey
The top five challenges faced by insurers include the following:

1) Issues with data protection and privacy
All respondents believed, one of the biggest challenges they face to optimally mitigate the risk of fraud is with respect to data protection and privacy.

2) Information sharing amongst insurers
The absence of a formal industry-level fraud database and the propensity of fraudsters to exploit (due to this loophole) leads to increased fraud.

3) Problems with data quality
Data quality and data architecture are key for insurers in their fight against fraud. More than 19 percent of respondents indicated this as one of the key challenges they faced.

4) Limited use of analytical tools
In case of fraud detection, it is important to be proactive, accurate, and timely. Fifty percent of life insurance respondents believed this was a significant challenge.

5) Keeping up with the modern fraudster modus operandi
We live in a dynamic world where technology is empowering fraudsters to think of new and innovative ways to commit fraud. As 50 percent of both life and health insurance respondents consider this to be a challenge, it has become imperative for the sector to be ahead of the curve and pre-empt fraudulent incidents.

About the survey

The survey, conducted in the second quarter of FY2023, was based on qualitative interviews with key C-suite stakeholders/senior management responsible for compliance and FRM across leading private insurers. The views were obtained through detailed discussions on the current and future fraud landscape.

Each statistic used in this report indicates a consolidated number of responses for the respective question. For multiple-choice questions, the weighted average of responses for that question has been used to derive the statistics.

This press release has been issued by Deloitte Touche Tohmatsu India LLP.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see for a more detailed description of DTTL and its member firms.


Media contact

Mou Chakravorty
Deloitte India
Tel: +91 8454042392

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