Risk Management in Insurance Industry Fraud †Free Samples

Question: Discuss about the Risk Management in Insurance Industry Fraud. Answer: Introduction Brief Statement of the problem Insurance fraud can be regarded as one of the most severe complications that threaten the viability of different insurance corporations. However, the insurance frauds also drive the entire costs of insurers as well as premiums of diverse policyholders. However, it covers an extensive range of illicit practices as well as illegal actions. Based on reports, it can be hereby stated that in and around 80 to 85% of the insurance premiums that are paid in Australia every year are essentially returned in specific claims funded to diverse policyholders. At present, it can be observed that this specific amounts now amounts to around AUD14 billion dollars per annum (Young, 2013). However, out of the total amount, roughly 10% or else AUD $1.4 billion, are gained by all the policyholders who, as said by the Insurance Council of Australia, present fabricated or else inflated claims (Wallach, 2013). Again, insurance corporations can observe the risk of different employees misusing diverse confidential information as well as colluding with fraudsters is increasing. However, the rigorousness of fraud can range from a slight overstatement to deliberately creating loss of diverse covered assets. Research Aim and objectives The aim of the current study is To assess different categories of life insurance frauds To critically analyse the risks related to the frauds in the insurance industry and to frame an ultimate risk management strategy to restrain or minimalize the frauds related to life insurance To critically explore the fraud risk management as well as the internal control system in the insurance industry for framing the fraud prevention mechanism Brief Methodology: Comprehensive Literature Review The initial stage in the process of development of clear understanding of the present topic is to carry out an all-inclusive review of the available literature on diverse important research theme. However, this assessment therefore includes published academic papers available from online databases, assessment along with analysis of pertinent business articles, research papers and reports from Australian as well as International Insurance Councils. Risk of Insurance Fraud in Australia According to the reports of Insurance Council of Australia (ICA), it can be said that frauds adds around an additional cost of AUD70 to the overall cost of all the general insurance schemes issued in the nation Australia, with the mean family contribution exceeds more than AUD 400 per annum towards fraudulent actions (Hymes Wells, 2014). Quantitative as well as Qualitative data The current study uses descriptive data for describing basic factors of the data in this specific study obtained from insurance agencies for example, number of insurance claims made, total number of suspicious claims registered, total number of confirmed fraud of customers, specific data on annual transformations in fraud premiums, customer gratification along with customer complaints. In addition to this, qualitative information can also be collected from insurance agencies concerning prevention of fraud as well as revealing strategies (Young, 2013). For the purpose of the present study, the learner intends to utilize quantitative data for acquiring relevant information regarding quantities that is essentially the information that can be properly measured as well as written down with numbers. For example, numeric records from different insurance agencies on fraudulent activities, number of registered cases and many others (Hymes Wells, 2014). For the purpose of the present study, the learner intends to utilize both the primary as well as secondary sources of data. The learner intends to conduct field survey as well as interviews for acquiring the primary data. On the other hand, the learner intends to acquire secondary data from published records made available by different insurance agencies, official websites, magazines and reports and many others. Survey Research- Self Administered questionnaire Subsequent to the extensive review of the literature, the learner proposes to undertake survey of the customers targeting from among the Australian public highlighting towards insurance industry to improve understanding of the present issue (Young, 2013). Experiment A specific experiment can be carried out for comparison of the responses provided by the particular control as well as intervention group in order to determine statistical significance between the responses of the people to different questions. However, this category of experiment takes place in a contrived environment, provided the nature of the given research topic under consideration to deliver a reliable and at the same time controlled experiment (Wallach, 2013). The learner also intends to ascertain the number of samples to be used for this study along with the approach of sampling to be considered to ensure representative of the entire population. For the purpose of the present study, the learner intends to gather the requisite sample by using non-probabilistic sampling method where the individuals do not have equal chances of getting selected. In this case, the samples are selected founded on the subjective judgement of the learner rather than random selection. References Hymes, L., Wells, J. (2014). Insurance Fraud Casebook. Somerset: Wiley. Wallach, L. (2013). Protecting clients from fraud, incompetence and scams. Hoboken, N.J.: Wiley. Young, M. (2013). Financial Fraud Prevention and Detection. Hoboken: Wiley.