According to a new report published by Allied Market Research, titled, “Insurance Fraud Detection Market," The insurance fraud detection market size was valued at $3.3 billion in 2021, and is estimated to reach $28.1 billion by 2031, growing at a CAGR of 24.2% from 2022 to 2031.
According to FBI, the insurance industry in the U.S. consists of over 7000 companies that collectively received over $1 trillion annually in premiums. FBI also estimates the total cost of life insurance fraud detection (non-health insurance) to be more than $40 billion annually. Furthermore, it must be noted that insurance fraud is not a victimless crime, the losses due to frauds, impact all the involved parties through increased premium costs, trust deficit during the claims process and impacts to process efficiency and innovation. Hence, the insurance industry has an urgent need to develop capability that can help identify potential frauds with a high degree of accuracy, so that other claims can be cleared rapidly while identified cases can be scrutinized in detail.
On the basis of application, the payment fraud and billing fraud segment is the highest growing segment. This is attributed to the fact that insurance claim fraud detection software helps in identifying payment and billing fraud, by offering various data analytics, artificial intelligence, and data integration solutions.
Based on region, Asia-Pacific attained the highest insurance fraud detection market growth in 2021. This was attributed to the fact that modernization or digitalization is the most accelerating the insurance fraud detection market trends in Asia-Pacific. At start of the pandemic many companies were reluctant to sell insurance without a face-to-face interaction, but as it started to increase insurers started to invest in digital tools & solutions, and hybrid agency model.
Insurance frauds increased during the COVID-19 pandemic and investigations have largely moved to digital channels. Moreover, fraudulent claims and fake emails are also being reported by several insurance companies. These rising frauds drive the adoption of AI in insurance fraud detection systems among insurance firms for handling these attacks and maintaining privacy.
Key findings of the study
- By component, the solution segment led the insurance fraud detection market in terms of revenue in 2021.
- By deployment mode, the on-premises segment accounted for the highest insurance fraud detection market share in 2021.
- By region, Asia-Pacific generated the highest revenue in 2021.
The key players profiled in the insurance fraud detection market analysis are BAE Systems., Duck Creek Technologies, Equifax Inc., Experian Information Solutions, Inc., FICO, FRISS, Fiserv, Inc., IBM, LexisNexis Risk Solutions Group., and SAS Institute, Inc. These players have adopted various strategies to increase their market penetration and strengthen their position in the insurance fraud detection industry.