About 60 per cent of Indian insurance companies are seeing a rapid increase in insurance fraud, especially in the life and health insurance space, according to Deloitte’s Insurance Fraud Survey 2023. 

“An overwhelming majority of respondents across life and health insurance have indicated that they witnessed a significant increase in fraud over the last two years. Sixty percent indicated a significant increase while 10 percent showed a marginal increase in fraud incidents,” the survey said.

Further, even as insurers consider mitigating fraud as a priority, only 60 per cent of the respondents plan to increase their budgets marginally whereas the rest are likely to keep investments at the same level, the survey showed.

The survey, conducted in Q2FY23, is based on qualitative interviews with key stakeholders/senior management across leading private insurers.


The major factors contributing to the rise in frauds include increased digitisation, remote working post the pandemic and weakened controls. The survey showed that the top five challenges faced by insurers include issues with data protection and privacy, lack of information sharing amongst insurers, problems with data quality, limited use of analytical tools in case of fraud detection and keeping up with the modern fraudster modus operandi.

While technology-led innovation has brought agility, speed, superior customer experience, and ease of use, it has led to vulnerabilities and risks in the overall ecosystem leading to new fraud trends such as data theft. In addition, traditional frauds such as collusion between third parties and mis-selling of insurance products continue to prevail and are still a concern for the sector, Deloitte said.

As many as 70 per cent respondents indicated data quality issues as a common challenge, whereas 60 per cent said they are facing challenges related to data protection and privacy. “The survey pointed to the weakness in controls to prevent/detect frauds as one of the reasons for increased fraud incidents. Introduction of new technology, changes in ways of working, especially in light of the pandemic, may have resulted in the weakening of controls over time which provides an opportunity to the fraudsters to exploit the loopholes in the system,“ said KV Karthik, Partner, Forensics, Financial Advisory at Deloitte India.

With frauds becoming a board-level agenda and digital boundaries constantly blurring, there is a clear need for insurers to relook at their operating model that integrates a larger agenda, which will work across business, compliance, legal, underwriting and operations departments, he added.