In an era of rapidly advancing technology, the world has undeniably become a smaller place. The ease and speed of communication, coupled with the widespread availability of information, have bridged the gaps between nations and cultures. This interconnectedness has undoubtedly brought numerous benefits, facilitating global trade, fostering cross-cultural understanding, and opening up new opportunities.
However, as the world shrinks, insurers must also recognize the challenges that arise. The normalization of online or direct-to-consumer sales methods, while convenient, has inadvertently provided fertile ground for fraudsters. The globalization of financial markets has introduced increased instability, and the lack of uniform record-keeping controls in many countries has further complicated matters.
As insurers navigate this smaller world, it becomes imperative to exercise caution, conduct thorough investigations, and never underestimate the importance of verifying the information received, ensuring that trust is placed in the truth behind the documents rather than the words on the surface.
Foreign Death Claims
Trust is the foundation of the insurance industry, but that trust has a sobering reality, with a particular focus on foreign death claims: insurers cannot afford to blindly trust the words written on the documents they receive from claimants. Instead, insurers must place their trust in the facts underlying the documents and diligently verify the authenticity and accuracy of the information provided. Failing to do so can have severe consequences, leading to the payment of unsavory claims and the potential for fraudsters to further target their companies.
When delving into fraudulent foreign death claims, a startling pattern emerges. Approximately 90-95% of the fraudulent cases we investigate involve documents that were issued by the relevant offices in-country. These documents, ranging from death certificates to official records, appear legitimate on the surface. However, further scrutiny often reveals discrepancies, inconsistencies, or even complete fabrication. The remaining 5-10% of fraudulent cases involve documents that were procured through illicit channels, such as online platforms specializing in counterfeit documentation.
It is important to note that fraudulent cases are not limited to countries with a reputation for corruption. While the global corruption index is a useful source to consult, we have encountered fraudulent cases in countries where robust controls on document issuance were expected. This serves as a reminder that even in seemingly trustworthy jurisdictions, the risk of fraudulent claims looms large.
Furthermore, the rise of online or direct-to-consumer sales methods has amplified the incidence of fraud, not only in foreign death claims but in death claims in general. The convenience and accessibility offered by these sales channels have inadvertently created opportunities for fraudsters. When coupled with increasing global financial instability and a lack of record-keeping controls in many countries, the recipe for fraud becomes readily available.
Foreign death claims pose a unique set of challenges. The unfamiliarity of insurers with the processes and norms in foreign countries can be exploited by fraudsters. Insurers must exercise extreme caution when processing claims from unfamiliar territories. Verifying the accuracy of the documentation becomes even more crucial in these cases, as it may involve navigating unfamiliar legal frameworks and bureaucratic systems.
Fraudulent Claim Files
One aspect that demands heightened scrutiny is the information contained within the claim file. It’s imperative to review all details, including identifiers on the application, at the time of the claim. This step is particularly crucial due to the alarming increase in wagering contracts, wherein the beneficiary's direct contact information is deceptively filled in as the insured's. This manipulation allows fraudsters to assume control over critical information and communication, enabling them to orchestrate fraudulent claims.
Foreign Insurance Fraud
Another disconcerting trend is the emergence of synthetic individuals who are being reported as deceased. These fictitious deaths, though challenging to identify, can be unraveled with a thorough investigation. Opting for "express investigations" may seem appealing due to time constraints, but it is imperative to rely on a team of experts equipped with knowledge of in-country processes, cultures, investigative techniques and know-how. Such an approach not only safeguards insurers against fraudulent claims but also instills confidence in claims decision-making.
Insurance Fraud & The Health of Your Company
Insurers must understand that fraudulent claims pose a significant threat to the financial health of their companies. The costs incurred due to fraudulent payouts can lead to increased premiums, diminished customer trust, and ultimately, damage the reputation of the entire industry. By recognizing the importance of verifying documentation beyond face value and conducting pointed, meticulous investigations, insurers can protect themselves and their policyholders from ever-increasing occurrences of fraud.
The adage "trust but verify" holds tremendous relevance in the insurance industry. The rise of fraudulent death claims, both domestic and foreign, necessitates a shift in the approach taken by insurers. Scrutinizing documentation, reviewing all information within the claim file, and conducting comprehensive investigations are essential steps to combat fraud effectively and provide a sentinel effect. Having a trusted vendor that not only knows the insurance industry but has deep global roots will give you the confidence that you are making a claims decision with all the cards on the table.
Need Help With Your International Fraud Investigation?
If you find yourself in need of assistance in preventing or detecting fraud domestically or internationally, we're happy to provide out expertise. Even if your case is not insurance related, we have plenty of experience with a variety of fraud investigations. Please reach out to learn more.