Effective fraud prevention today means P&C carriers need to be both proactive and reactive, with multifaceted methods of detection that create a "perimeter defense" against misrepresentation. Insurance-company executives have to employ enterprise-wide solutions that examine insurance applications at underwriting and apply intelligence gained through investigation of fraudulent claims to predict policyholder behavior early in the process.  

Here are several strategies to help prevent insurance fraud:

1. Keep fraudsters out of your insurance pool. If insurers can keep out the worst risks—individuals who become rate evaders, perpetrators of arson for profit, claimants who fabricate or exaggerate property damage, leaders of or participants in organized fraud rings—they will be ahead of the game in terms of fraud prevention. Intelligence gathering during the application process is mandatory in building an effective perimeter defense.

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