Insurance fraud costs the US $308.6 billion dollars every year through higher premiums and elevated medical and legal costs. Broken down further, the FBI estimates P&C insurance fraud to be around $40 billion annually. It is estimated that the cost of casualty fraud adds another $6.8 to $9.3 billion to auto casualty losses every year. For Workers’ Compensation, claim and premium fraud is estimated at $34 billion annually.
Following these numbers, it comes as no surprise that managing fraud within the insurance industry continues to be a global priority for stakeholders in the insurance industry. Insurance costs have been on the rise in recent years due to many different macroeconomic factors — and fraud only adds to the costs. Insurers must do all they can to mitigate and manage fraud in the insurance business.
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