Fraud Risk Scenario:
A policyholder deliberately sets fire to their commercial premises shortly after taking out an insurance policy with extensive coverage, in order to collect the indemnity payment.
Detection:
Temporal analysis: Alert system for claims occurring within the first few months after the policy is taken out.
Internal data cross-checking: Verification of other similar claims (fire, water damage) filed under different contracts held by the same policyholder.
Technical investigation: Involvement of a fire expert to determine the cause of the fire and identify any intentional origin (use of accelerants, multiple ignition points).
Financial analysis: Examination of the insured’s financial situation (financial difficulties, debts) that could reveal a motive.
Prevention:
Explicit contractual clause: Clear inclusion and emphasis of the exclusion of intentional acts in the general terms and conditions.
Strict legal policy: Systematic initiation of legal proceedings for fraud and reporting to judicial authorities to deter potential fraudsters.
Preliminary verification: Enhanced underwriting controls for policies with very high coverage or clients with a history of frequent claims.
Awareness: Clear communication to clients about the serious consequences (policy termination, penalties, criminal record) of filing an intentional claim.
Share Your Feedback:
What tools, techniques, and processes are used to detect and prevent such frauds?
