Insurance fraud is defined as someone consciously deceiving an insurance company for personal gain. In extreme cases an insurance policy is taken out with the sole intention of bringing a claim. Fraud may also be over-stating a financial position or falsifying supporting material, but can also include extreme actions such as murder, suicide, a faked disability, or disappearance.

Generally speaking, fraud is a huge problem for insurers. This is not just a threat with large sums, as some fraudsters have been caught after accumulating several low value life policies from multiple insurers. This is why the total line (the sum of all new and all existing/concurrent covers) should be the basis for any financial assessment.

Fraud can be difficult to prove at claims stage; therefore, it is important to detect warning signs during the underwriting process:

• Poor supporting financial evidence
• Multiple applications
• Unaffordability of premiums
• Questionable insurable interest
• Context does not make sense