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The Cost of Fraud
We know fraud is a costly problem. But how does the cost compare to other
expenses?
Consider this: Hurricane Andrew ravaged the East Coast in 1992,
causing an estimated $16 billion in damages. The storm is considered
one of America’s worst national disasters, but its financial
repercussions pale when compared to the cost of insurance fraud:
- In
total, insurance fraud costs more than $96.8 billion a year.
- Conservative estimates place the cost of property/casualty insurance fraud
at $20 billion a year.
- Health insurance fraud estimates top $61 billion a year.
- Life insurance fraud exceeds $11.8 billion a year.
- Auto physical damage fraud reaches about $3 billion each year.
- Disability insurance fraud is estimated to account for $1 billion each
year.
- Insurance fraud is estimated to be the second largest economic crime in
America, exceeded only by tax evasion.
Source: Conning & Co. 2000 report
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