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From Europe With Love: Lessons in Fraud

Without the right core claims systems, European and U.S. insurers will remain a step behind fraudsters and the competition.

By Michael A. Costonis | Updated on July 29, 2013

North American p&c insurers are facing a difficult challenge. They must be able to detect fraudulent or inflated claims while processing legitimate claims efficiently and fairly. Insurers who are able to accomplish that are in position to build customer satisfaction and loyalty by improving claims service—the one spot with the potential to either delight or disappoint insurance customers in dramatic fashion.

Our survey of over three dozen European P&C insurers earlier this year indicated just how difficult this undertaking can be. More than two-thirds—71 percent—of the claims executives we surveyed said they have seen an increase in the number of fraudulent claims over the past three years. The reported increase averaged 10 percent over that time. Additionally, more than one-third (39 percent) of respondents said they believe that five to 10 percent of claims paid by their organizations over the past year were actually fraudulent, yet went undetected because of inadequate detection capabilities. 

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