Credit information company Experian India on Thursday announced the launch of Hunter Fraud Management Services for the life insurance sector in India. The offering will help life insurance companies to be a part of the Hunter Closed User Group (CUG) for detection of life insurance fraud.
Life insurance companies that join the CUG will share with Experian any data relating to new policy proposals and claims. The credit information company is looking to offer similar services to general insurers as well. In India, Experian is the only provider of application fraud detection services using National Hunter.
“We have over 43 banks sharing data in the CUG and using the Hunter services to identify potential fraudulent applications. Today, more than 50 per cent of retail banking applications are screened through National Hunter on a monthly basis,” Experian India Country Manager Mohan Jayaraman said.
V Manickam, secretary, Life Insurance Council said, “We are pleased to be associated with Experian India to build a data repository and create a fraud monitoring framework for life insurance companies in India. According to sources, Insurers lose about 6 per cent of their revenue annually due to fraud. With Insurance claim frauds on the rise, risk management in insurance is crucial. We believe that this framework would help tighten the system, thus helping insurers save money on account of false claims.”
With 15 life insurance companies already a part of this platform, this repository could help in reducing premium rates as insurers need not buffer for such losses, improving operational efficiency and the bottom line of insurers and in keeping bad elements out of the system.
“Over the past 10 years, the Indian insurance industry has grown at a compounded annual growth rate of around 20 per cent. However, with the exponential growth in the industry, there has also been an increase in frauds. With life insurance companies now being added to this framework, Experian will be able to pull out fraudulent applications or policy proposals quickly,” Jayaraman said.
The new insurance Act has also necessitated that fraud be detected before three years. Section 45 says life insurance companies cannot repudiate a death claim on the ground of mis-statement of facts or deliberate suppression of certain facts after three years from when it was effected.
