The Cost of Insurance Fraud

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. Hurricane Katrina, which struck the Gulf Coast in 2005, caused approximately $41 billion in losses. These storms are considered 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

• Print
• Bookmark
• Link
• E-mail
• Share
• Blog