ING NCE
There are a number of factors at play in the global economy right now that should prompt insurers to fear a heightened fraud risk in the months ahead . Inflation is rising , driven by food and fuel prices ; cost-of-living pressures are squeezing household and business budgets alike . And many Western governments are beginning to question the long-term sustainability of domestic support packages , like subsidies or handouts offered during the pandemic or in response to the war in Ukraine .
In desperate times , some fraudsters will turn to desperate measures .
“ We know from previous experience that when there is financial hardship , the volume of fraud increases , so we expect to see that happen as we face the latest challenge ,” says Clare Lunn , Head of Fraud at UK-based insurance company Markerstudy . Lunn has over 20 years ’ experience in the industry , including chairing the General Insurance Fraud Committee for over three years .
Nigel Cannings , CTO at Intelligent Voice , is an expert in insurance technology that can help revolutionise the industry – including detecting fraud . He concurs with Lunn about the nature of the threat we ’ re facing : “ Unfortunately , in a recession , there is always an increase in fraud ,” Cannings tells InsurTech Magazine . “ There was a reported 17 % increase in 2022 , which was itself 11 % above pre-pandemic levels . Surveys have shown that during a recession , people ’ s willingness to exaggerate claims does increase , although the number of people who view insurance fraud as a completely victimless crime does seem to be decreasing .
“ Fraud increase in a recession , however , does not seem to be completely linked
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