There is a need to minimise the risk of fraud in life insurance, according to Mr V Manickam, the secretary general of the Life Insurance Council.
On an annual basis, the life insurance industry loses about INR400bn ($5.7bn) to fraud, reported Moneycontrol. Mr Manickam said about 8.5% of revenue is lost to fraud by insurance companies.
Speaking at an event last month organised by the Association of Insurance Claims Management, he said that steps are being taken by the industry to identify fraud. The Insurance Information Bureau of India is also helping to identify and help curb fraud. There is a need to eliminate fraud at the underwriting stage itself.
In the financial year ended 31 March 2018 (FY2018), about 49% of the total number of frauds detected were perpetrated by intermediaries while 28% were by policyholders. In certain cases, employees were also found to be involved.