Life Insurance Fraud–Risk Management and Fraud Prevention

Insurance fraud is one of the most serious problems threatening viability of insurance companies.Insurance frauds are driving up the overall costs of insurers and premiums for policyholders. It encompasses a wide range of illicit practices and illegal acts. Insurance companies have witnessed increase in the number of fraud cases since couple of years. Risk Management has been acquiring monumental importance in insurance industry. Insurance business is of dynamic nature that puts an additional onus on risk management. So insurance companies need comprehensive risk management strategies that involve fraud risk assessment and fraud prevention. The purpose of this study is to analyze various types of life insurance frauds, assess the risks associated with these frauds and finally frame an ideal risk management strategy to curtail or minimize the frauds associated with life insurance. The existing literature on life insurance fraud is used to explore the fraud risk management and internal control system of various organizations.