As Digitizing Increases, So Does Fraud Risk

Insurers have offered some level of digital capabilities for sales and service for years, but customers’ and distributors’ adoption has been slow.

When the COVID-19 pandemic emerged, carriers had to evolve their digital offerings seemingly overnight.

While this shift to digital improved customer experience, sped up service and policy issuance and cut costs, it also opened up opportunities for bad actors to commit financial and identity fraud.

Strong digital capabilities mean insurers also need strong identity verification and fraud mitigation capabilities. The best way to keep the security up to date is to think of it as a continuous process, with regular evaluation of the defenses and enhancements or deployment of new solutions when necessary.

Insurance customers, like those in other financial areas, are at risk of identity theft. In most cases, this happens through a large-scale data breach, but it may also occur when a family member fraudulently purchases a policy, for example. As more interactions occur digitally, the number of fraud instances rises.