Report Overview

Global Insurance Fraud Detection Market Forecast and Trends

Global Insurance Fraud Detections market forecasts a CAGR of 21.66% from USD 3.7 billion in 2019 to reach USD 12 billion by 2026. The major factors contributing to the growth of the market are the need to manage huge volumes of identities by organizations productively, increasing operational efficiency & improving the customer experience, growing adoption of advanced analytics techniques, and stringent regulatory compliances.

The emergence of advanced solutions such as the use of automated business rules, self-learning models, text mining, image screening, network analysis, predictive analytics, and device identification is estimated to deliver actionable insights to advance claims processes. As a result, insurance organizations are adopting fraud detection solutions that not only recognize the genuine claims process but also decrease the number of false positives. Various factors, such as a rise in the sophistication level of cyber-attacks and enormous monetary losses due to these attacks in the insurance sector, are anticipated to drive the market. An increase in the generation of enterprise data and its intricacy, high industry-specific requirements, and an increase in the incidence of fraud further supplement the fraud detection market growth.

Global Insurance Fraud Detection Market: Overview

The fraud detection system is a programming application that is used to provide analytical solutions against fraud incidence and assists in identifying future occurrences. Insurance fraud detection is done to detect and prevent insurance frauds. Insurance fraud happens when an insurance company, agent, adjuster, or consumer commits fraud to get an illegitimate gain. Frauds can also occur during the process of buying, selling, or underwriting insurance. Insurance fraud can be classified under different kinds of frauds, for example, from fraud against consumers to fraud against insurance companies. Insurance fraud has been weighed at over a hundred billion dollars every year. It imposes costs on insurance companies and impends their competitiveness along with financially destroying the customers, economy, and society as a whole.

Growth Drivers

Increasing adoption of advanced analytics contributes to the market growth

The introduction of big data analytics and cloud computing services and the rapid growth of mobile banking are key factors driving the growth of the market for fraud detection & prevention. Various organizations are adopting these services to enhance its operational efficiency and customer experience. The cloud infrastructure allows organizations to meet cloud security compliance requirements for encryption, task separation, and protected data access control. Moreover, an increase in enterprise data generation and its complexity, high industry-specific requirements, and an increase in fraud incidence further supplement the growth of the market for fraud detection & prevention. Advanced solutions such as the application of automated business rules, self-learning models, text mining, predictive analysis, image screening, network analysis, and device identification are expected to provide actionable insights to improve claims processes. These solutions are anticipated to enable an enterprise to identify higher speed and accuracy of fraudulent activities, thereby enhancing consumer experience by making quick payouts.

The exponential rise in the sophistication of cyber-attacks in the insurance sector will drive the overall market growth

With the growing awareness of criminals and sophisticated crimes, fraud prevention and detection capabilities are increasing. Global concerns about the constantly increasing cases of insurance fraud, coupled with sophisticated organized crime, have signaled the need for all insurance companies to act consistently. Different factors, such as an exponential rise in cyber-attack sophistication and substantial monetary losses due to these assaults in the insurance sector, are expected to drive the market.

Restraint

Lack of awareness regarding fraud detection solutions

Lack of organizational awareness for the value of fraud detection solutions and inadequate implementation, coupled with the lack of integration of fraud detection solutions across organizational networks, may curb market growth.

Global Insurance Fraud Detection Market: Solutions

Based on solutions, global Insurance Fraud Detection Market is bifurcated into Fraud Analytics, Authentications, Governance Risk & Compliance (GRC), and others. Fraud analytics is expected to constitute the largest market share. Such systems track and analyze data from multiple data sources, identify anomalies and suspicious & irregular activity across all channels, and provide real-time control mechanisms to prevent fraudulent practices. Hence, leading to the growth of the segment.

Global Insurance Fraud Detection Market: Services

Through the services, the Insurance Fraud Detection market is segmented into Professional Services (Consulting Services, Maintenance Services), and Managed Services. The managed services are expected to grow at a significant rate during the forecast period as managed services help to improve fraud detection process, thereby reducing the losses of a company. The vendors are constantly involved in developing excellence centers or innovation centers to help various insurers in improving their fraud detection processes. These centers provide access to the expertise, tools & techniques, and advanced technologies to improve fraud detection capabilities.

Global Insurance Fraud Detection Market: Deployment Mode

Based on Deployment Mode, the Global Insurance Fraud Detection Market is bifurcated into Cloud, On-Premises. Deployment of cloud-based fraud detection solutions is expected to dominate the market. The cloud-based platform offers a unified way to secure business applications in the form of SaaS-based insurance fraud detection services. Cloud-based systems are significantly less costly than on-site delivery, allowing companies to slash IT costs, including equipment and support personnel. These factors allow, companies to follow the cloud-based implementation model for the large-scale delivery of fraud detection solutions.

Global Insurance Fraud Detection Market: Organization Size

By organization size, the global market for Insurance Fraud Detections is classified into Small and Medium-Sized Enterprises, Large Enterprises. Owing to the increasing incidences of insurance fraud and cyber-attacks on SMEs, the SMEs segment is expected to grow at a higher CAGR during the forecast period. The SMEs are small in size but they cater for a large number of customers worldwide. Due to financial constraints, reliable and detailed security solutions are not introduced at SMEs.

Global Insurance Fraud Detection Market: Regional Insights

Global Insurance Fraud Detection market geographically segmented into North America, Europe, Asia-Pacific, and Latin America & Middle East & Africa. During the forecast period, North America is expected to hold a major share in the market for detecting insurance fraud. The criminals look forward to taking advantage of the people across the country. Since most people in the region have health insurance, there is a variety of free medical care or supplemental consultation deals. The rise in threats and vulnerabilities and compliances from the government has made North America the most lucrative industry for various categories of vendors.