The global insurance fraud detection market size is expected to reach USD 9.7 billion by 2025, registering a CAGR of 13.7% over the forecast period, according to a new report by Grand View Research, Inc.
Detecting and preventing fraudulent activities is a global challenge for insurers. However, the emergence of advanced solutions such as the use of automated business rules, self-learning models, text mining, predictive analytics, image screening, network analysis, and device identification is expected to deliver actionable insights to improve claims processes.
As a result, insurance organizations are adopting fraud detection solutions that not only recognize the genuine claims process but also reduce the number of false positives.
Key suggestions from the report:
- Solutions segment held the leading market share in 2018 and is expected to continue leading over the forecast period
- Managed services segment is anticipated to exhibit the fastest CAGR of 15.6% over the forecast period
- Large enterprise segment dominated the market with highest revenue share in 2018
- The Asia Pacific region is anticipated to witness the fastest CAGR over the forecast period
The prevention and detection of fraud capabilities are increasing with the growing awareness of perpetrators and sophisticated crimes. Global concerns about the ever-increasing cases of insurance frauds coupled with sophisticated organized crime, have signaled a need for coherent action by all insurance companies.
As per a research conducted by the Federal Bureau of Investigation (FBI), the total estimated cost of insurance fraud in the U.S. is expected to be more than USD 40 billion per year. As a result, in the U.S., it has led to an increased premium of approximately USD 420 to 700 per year for the average earning family.
Similarly, according to the Association of British Insurers in the U.K., insurer unearthed more than 113,000 fraudulent claims and 449,000 dishonest insurance applications, valued at USD 1.3 billion. Thus, to curb fraudulent claims coupled with the various stringent regulations set by the government, enterprises are expected to adopt these solutions in the near future. These solutions are expected to enable an enterprise to identify fraudulent activities with higher speed and accuracy, thereby improving the consumer experience by realizing fast payouts.
In the insurance sector, fraudulent activities are primarily categorized as criminal and cultural. In criminal type, professional perpetrators habitually try to identify a weak system to attack. While in cultural type, a genuine claimant is opportunistic by exaggerating a claim. With the help of data analytics, insurance companies can analyze and detect the possibility of fraudulent activities.
The user can enter data, and claim applications are automatically given a score to indicate the likelihood that scam has occurred. Thus, the use of predictive modeling can potentially produce a quantified score that helps a company to understand the propensity of a scam.
Monitoring the arrived score through the use of advanced solutions is expected to show more accurate and effective results than that of traditional fraud detection methods. However, relying solely on technology for suspecting the fraudulent activities to be flagged is expected to be a key challenge for the insurers. Thus, to overcome such challenges, analysts are required to initiate immediate action and follow appropriate measures to help the company reduce losses.
Grand View Research has segmented the global insurance fraud detection market on the basis of component, solutions, services, deployment, organization, and region:
- Insurance Fraud Detection Component Outlook (Revenue, USD Million, 2015 - 2025)
- Insurance Fraud Detection Solutions Outlook (Revenue, USD Million, 2015 - 2025)
- Fraud Analytics
- Governance, Risk, and Compliance (GRC)
- Insurance Fraud Detection Services Outlook (Revenue, USD Million, 2015 - 2025)
- Professional Services
- Managed Services
- Insurance Fraud Detection Deployment Outlook (Revenue, USD Million, 2015 - 2025)
- Insurance Fraud Detection Organization Outlook (Revenue, USD Million, 2015 - 2025)
- Small & Medium Business (SMB)
- Large Enterprise
- Insurance Fraud Detection Regional Outlook (Revenue, USD Million, 2015 - 2025)
- North America
- Asia Pacific
- Latin America
- Middle East & Africa
- North America
Find more research reports on Next Generation Technologies Industry, by Grand View Research:
- Fraud Detection & Prevention Market – The global fraud detection & prevention market size was valued at USD 17.33 billion in 2018 and is expected to grow at a CAGR of 18.9% over the forecast period.
- Payment Security Market – The global payment security market size was estimated at USD 15.79 billion in 2017. It is expected to expand at a CAGR of 12.3% over the forecast period.
- Spoil Detection Based Smart Label Market – A smart label uses the technology beyond conservative bar codes, and forms a crucial surface of printed electronics through the sensor technology.
Gain access to Grand View Compass, our BI enabled intuitive market research database of 10,000+ reports
About Grand View Research
Grand View Research, U.S.-based market research and consulting company, provides syndicated as well as customized research reports and consulting services. Registered in California and headquartered in San Francisco, the company comprises over 425 analysts and consultants, adding more than 1200 market research reports to its vast database each year. These reports offer in-depth analysis on 46 industries across 25 major countries worldwide. With the help of an interactive market intelligence platform, Grand View Research helps Fortune 500 companies and renowned academic institutes understand the global and regional business environment and gauge the opportunities that lie ahead.