Threat of online fraud in Insurance

As technology is continually advancing with more and more mobile phones bought everyday, and easier access than ever to the internet; there are several kinds of frauds that insurance companies might face.

The first kind of fraud takes place where culprits often create/open accounts in name of other people by using their details or even fictitious details. People also open accounts and purchase policies for non existent beneficiaries in order to manipulate the premium amount. Frauds often take place when the case of bad debt comes in. Here, insurers often continue providing coverage even after non payment for a certain period of time. This scenario also takes place in the case of lost/stolen cards. Third party online fraud plays a major role in these instances, where a victim naively purchases policy from an impostor who later might pretend to claim the premium on the victim’s behalf. Since the culprit already has all details of the buyer, he/she uses it to drain their benefits or cash premium. Another possibility of fraud arises a customer claims for a an increased or false claim amount. A large number of people often dupe the insurance companies by filing for an amount, which is much more than the actual amount they should be paid. With advancing technology, fraudsters also make use of call center scams or gather customer information from social media and trick them into giving access to their accounts.

Since such threats constantly oversee the insurance industry, Insurers now need to be better equipped when offering several digital insurance services in order to protect their customers and the organisation as well.