In today’s highly competitive marketplace, most insurance companies have already streamlined their operations to optimise cost structures. Commoditisation of markets and lower investment returns are keeping pressure on insurers to tightly manage expense ratios.
Historically, the insurance industry has accepted some level of incurred losses as a cost of doing business—10 percent is the industry average. As reported in recent headlines, fraud is on the rise as organised crime rings take advantage of regulation loopholes, overworked adjusters and investigators, easier access to information and a clogged court system. In addition to suffering losses due to fraudulent claims, insurance companies have to divert precious resources to identify, investigate and prosecute fraud at a time when they have little to spare.