TransUnion and Iovation predict that the increased use of online platforms to interact with insurance providers will result in new fraud challenges for insurance companies and their customers. Don't think this is only a risk for the insurance industry, this is also your risk.
They list several types of online insurance fraud that have spiked over the past several years.
ONE: The first is online application fraud, which involves a fraudster using another person’s information to open insurance policies for fake beneficiaries. Iovation saw this type of fraud rise 516% between 2015 and 2018.
TWO: Another type of fraud is Ghost Broking, which involves criminals buying or forging fraudulent insurance policies and then selling them to people who think they’re buying legitimate insurance. Victims of this type of fraud may not realize they’ve been scammed until they need to make a claim. According to Iovation, online Ghost Broking is up 139% since 2015.
THREE: A third technique is account takeover, which occurs when a criminal gains access to someone’s online account and uses it to either steal information or hijack an upcoming claims payment. Iovation says this despicable attack commonly involves life insurance policies.
FOUR: A fourth activity involves fraudulent claims. False or exaggerated insurance claims made over the Internet have risen by 271% since 2015.
FIVE: Finally, Iovation expects criminals to turn to social engineering to get what they want by impersonating policyholders.
“As online fraud prevention improves, fraudsters switch to the call center,” Iovation’s press release explains. “They gather data about policyholders by mining social media or the dark web. Fraudsters then combine high-pressure tactics with spoofing technology and use social engineering on agents and take over policyholders’ accounts or apply for new policies.”
Online insurance interactions are increasing rapidly, and insurance providers need to start preparing for these types of scams now. New-school security awareness training can address the human element and help your employees recognize fraud.