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Insurance fraud is a crime with victims

​Insurance fraud is by no means a victimless crime. Fraudulent insurance claims were made for a whopping €13 billion euros in 2017, according to calculations by Insurance Europe. This bill is footed by all insurance customers.

"In principle, insurance fraud is not much different from shoplifting. The costs incurred by the business affect prices, so you could say the criminals are also stealing from you, me and everyone else", says Risto Karhunen, head of security and loss prevention at Finance Finland.

The vast majority of insurance customers are honest customers – the type that companies compete for. Insurance investigation and fraud prevention are insurance companies' obligation towards their honest customers, so that the customers do not have to pay for the expenses lost to fraud.

Finnish insurance companies employ 35 insurance investigators, who handle the most glaring offences. Everyday fraud prevention is handled by other insurance company personnel, like salespeople, claims handlers and insurance experts.

"The main purpose of insurance investigation is not to save money as such. The primary goal is to find out what really happened, and savings are the by-product of that", Karhunen comments.

The insurance sector maintains a shared claims register, which also helps prevent insurance fraud. It is especially effective against the classic scheme where a criminal files claims in several insurance companies for one accident. These types of attempts are quickly flagged in the claims register.

Dishonesty is not something to brag about

In an insurance survey by FFI, 15% of respondents reported that they know someone who has defrauded an insurance company. The survey is done every two years.

This number shows a clear downward trend over the past decade. In other words, attitudes are improving. "Insurance fraud has become socially less acceptable in the 2010s. It's no longer something to brag about to your friends if you cheat an insurer", Karhunen notes.

Read the Insurance Europe publication: 
Insurance Fraud: not a victimless crime