The paper 'Insurance Fraud' is a great example of a Business Case Study. Fraud in the insurance industry has constantly been an enigma to the stakeholders. Today, the insurance industry faces extensive fraudulent cases that are siphoning billions from the very lucrative insurance business. Based on this, there have been numerous studies based on the subject of fraud that has clearly shown the failure points of the customary methods that have been used over the years to detect and contain fraud. Most of the studies done in the past have focused a lot of attention on the identification of fraudulent claims and transactions failing to take notice of the very culprits engineering and driving the fraud cases.
It is the realization of this that brought about the alternative structure of understanding the current insurance practices, the changes in the fraudster's strategies and the most common areas hit out on that not only provide an avenue for fraudsters but also expose the industry to a huge risk. In other words, alternatives in tackling fraud cases are shifting focus from individual cases to looking at a broader perspective and painting a true picture of fraud in the industry as a whole.
This calls for the application of technology and focusing on fraudsters rather that fraud as a single instance in a firm. This research, therefore, focuses on understanding fraud in the insurance industry from a basic level. In essence, this paper unveils the reasons why fraud is on an all-time high in the insurance industry, factors contributing to the fraud in the industry, and the various structures put in place by the industry to curb this vice. To achieve this, the first focus will be on fraudsters and how the subject of fraud is approached from a criminal perspective.
Firstly, fraudsters can be classified into three distinct categories based on the level of experience and aftermath of the attack. The first category is of opportunities that normally have genuine insurance claim cases with which they use to exaggerate and claim for more than is deserved for such a case. The second category is of the amateur fraudsters that take advantage of a genuine claim but take it further, perhaps by repeating the claim over and over thereby defrauding a firm with a reasonable sum.
However, these two categories are not as serious as the third and final category which is of the professional fraudsters. These can be taken to do swindling for a living, and as such have a lot of tricks up their sleeves and tend to exploit several loopholes in the insurance industry. Normally, professional fraudsters work as a network of individuals and they engage in a systematic and persistent pattern to commit insurance fraud.
Secondly, attention is shifted to understand why the insurance industry is a constant focus of fraudulent activities. Research clearly pointed to the fact that the existence of numerous loopholes presents in the fraud investigation procedures, and a general dislike e of the insurance sector to be the main contributing factors of such cases. These are further heightened by the fact that generally, differentiating genuine claimants from fraudsters more often than not is a very difficult and tedious procedure. For this reason, most insurance firms are either not willing to go through the entire process of lack sufficient resources to undertake takes a full investigation procedure.
Additionally, under normal circumstances, even after identifying a fraudulent claim it is increasingly difficult to isolate the individuals as identities are normally, hidden fake or mixed up. In essence, to curb fraud cases in the insurance industry calls for more than just procedures. It calls for a systematic application of the regulation, a corporation of relevant industry players, and the application of technology to ensure a full-proof system is laid out.
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