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- With more online
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"The advantages of an online insurance offering is undeniable. It makes business processes more efficient and the consumer experience more convenient," said
According to research from global market intelligence agency Mintel, in 2017 only 9% of
As mobile becomes more prevalent,
* Application - Fraudsters create accounts using someone else's personal information, fake details or a mix of the two. They traditionally open insurance policies for fictitious beneficiaries, or alter and falsify application information to reduce their premiums. Attempted online first-party application fraud -- when a person falsely applies for an insurance policy -- is up 516% among iovation customers from 2015 to 2018.
* Bad Debt - Insurers provide coverage for a period of time for which they do not receive payment. This is caused by a lack of payment with a bad check, stolen credit card, etc. Bad debt is a particularly major issue for auto insurance carriers and typically makes up 1-2% of all personal automobile insurance premiums written.
* Ghost Broking - Fraudsters purchase insurance with false details or create false documents that look like they are from a legitimate insurance carrier. They then resell the policy to an unsuspecting victim, who is then not covered if an event occurs. Online third-party application fraud -- when a person falsely claims to be a broker applying for another person's insurance policy -- is up 139% among iovation customers from 2015 to 2018.
* Account Takeover - This fraud occurs when someone not insured on a policy accesses it to either obtain sensitive information or dishonestly route an upcoming claims payment to themselves. This practice is more prevalent with life insurance policies. Preventing this fraud is critical to do without harming the customer experience.
* Claim - A claimant makes up or exaggerates a claim. Attempted online first-party claims fraud -- when a person applies for a fictitious or exaggerated insurance claim -- is up 271% among iovation customers from 2015 to 2018. Attempted online third-party claims fraud -- when a person falsely claims to be a broker applying for a fictitious or exaggerated insurance claim -- is up 63% among iovation customers from 2015 to 2018.
* Contact Center - As online fraud prevention improves, fraudsters switch to the call center. They gather data about policyholders by mining social media or the dark web. Fraudsters then combine high-pressure tactics with spoofing technology to socially engineer agents and take over policyholders' accounts or apply for new policies.
"Fraud is now top of mind for many insurance carriers, especially as digital engagement becomes more widespread in the industry," said
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Information is a powerful thing. At
1/ iovation defines risky transactions as those that its customers either deny or review further due to fraudulent indicators
2/ Mintel Reports -
3/ Mintel Reports - The Insurance Purchase Decision - US -