Addressing Fraud risks in the the Life Insurance industry
Secure your policy before it is too late
Some of the key challenges faced by life insurance companies while trying to mitigate the risk of fraud is the increased dependence on the branch network for sales, presence of numerous third parties in carrying out an insurance transaction, finding the right balance between automation of systems and manual intervention, putting in place a robust underwriting given the different touch points with the customer and decentralization v/s centralization with regard to defining the powers of the branches.
The Indian life insurance market has grown almost four times in the last ten years in terms of premium collected from USD 11.5 billion in FY 2003 to USD 59.9 billion in FY 20121. Life insurance density expanded from USD11.7 in 2002 to USD49.0 in 2011 at a CAGR of 17.2 per cent. But at the same time, estimated losses to customers on account of mis-selling of life insurance products amounted to a whopping USD 28 billion INR 1.5 trillion over the 2004-05 to 2011-122 period - a clear indication that the sector has its fair share of problems.
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