Underwriting fraud is the act of intentionally concealing or misrepresenting insured information at any point during the insurance process. It affects most lines of business and costs the insurance industry billions of dollars a year in potential revenue, according to the April 2021 report titled "P&C Underwriting Fraud: A Market Overview," prepared by Stuart Rose for the Aite Group. The report, which is based on interviews conducted with underwriting executives in February and March 2021, highlights the fact that increased insurance digitalization opened up the industry to a variety of cybercrime that should make executives even more sensitive to underwriting fraud risks than they may have historically been. (Heretofore, claims fraud has received much more attention, according to the Aite Group report.) Five specific insurance market trends that have created new bad actors, including those who engage in underwriting fraud, are: |

1. Digital transformation;
2. The COVID-19 pandemic;
3. Increased competition;
4. Customer experience initiatives, and
5. Shifting consumer attitudes about fraud.

"The full scale of insurance fraud is unknown. By nature, fraud is intended to go undetected, and if fraudulent behavior is not discovered right away, an insurer may never know it occurred," Rose writes. "Today, insurance companies recognize that fraud frequently begins during the initial application process, and they are investing more in technologies to combat underwriting fraud." Ten such fraud mitigation tools are highlighted in the slideshow above. Aite Group and the Coalition Against Insurance Fraud determined that more than half of insurers now employ one or more of these tools. Visit the Aite Group website to find out more about underwriting fraud in 2021 and buy a copy of its report. See also: |

• 5 incidents of insurance fraud from March
• Responding to insurance fraud in the wake of COVID-19
• Insurance fraud rises along with carriers' workload
• 10 things you should know about how AI fights insurance fraud