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IQ: Insurers Say Fraud on the Rise

Fifty-four percent of U.S. insurers expect an increase in the cost of personal insurance fraud.

By Industry IQ | Updated on October 31, 2012

According to a survey by FICO and PCI, 54 percent of U.S. insurers expect an increase in the cost of fraud related to personal insurance. Almost half of insurers estimated that fraud costs represent 5 to 10 percent of their claims volume, while 32 percent reported that the ratio could be as high as 20 percent. The area identified as most exposed to fraud is the commercial auto line with a total of 80 percent of insurers

The majority of insurers attribute the increase in fraud to current economic conditions. Approximately 60 percent expect an increase in workers’ comp and auto fraud rings, but only 17 percent of insurers believe the rise of criminal gangs plays a significant role in the rise of fraud.

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