This archive report was first published on 5 November 2019.
As of 2019, the global insurance sector has experienced rapid growth, with an increasing number of sophisticated products being offered to customers. However, this dynamic market has also made it vulnerable to fraudsters.
Insurance fraud is often perceived as a victimless crime, but the reality is far from it. While most claims are genuine, an ever-increasing number of people make fraudulent and exaggerated claims, resulting in significant financial losses for insurance companies.
The types of insurance fraud are diverse, ranging from criminal gangs engaging in fraud rings to individuals exaggerating claims to receive more money from their insurance company. In some cases, individuals may provide false or incorrect information to gain lower insurance premiums.
Insurance fraud can take many forms, including motor vehicle and household/personal insurance. The Association of Kenya Insurers (AKI) has introduced a virtual motor insurance certificate to combat insurance-related fraud in the industry.
This shift to virtual certificates aims to eliminate cases of double insurance, fake certificates, and stolen insurance certificates. The digitisation of insurance certificates will also save insurance companies the cost of physically delivering certificates to their customers.
As fraudsters continue to adapt and evolve, the insurance industry must also embrace new technologies to stay ahead. A collaborative approach between all stakeholders is essential in the fight against insurance fraud.
By leveraging emerging technologies, the industry can better recognise and predict emerging fraud trends and patterns, ultimately staying one step ahead of fraudsters.
