Fraud hasn't received as much attention recently as the other causes of spiraling premiums. Big claims losses, rising costs and poor investment returns by insurers are among the most cited reasons why homeowners', auto and health insurance premiums are rising. Fraud is a rapidly growing menace in the insurance industry. This is undoubtedly not a new issue, but has existed since the industry's beginnings in the seventeenth century; however, it received little attention until the 1980s.

We are living in a world where frauds, scams and cheating schemes have become the order of the day. Though fraudsters and cheats constitute a small fraction of the society, their avaricious activities create great financial hazards to the society. Sometimes, their misdeeds may cause a loss which has a systemic effect on the entire economy and it takes some years before normalcy is restored.

Recently, a newspaper revealed the ways in which companies take insurers for a ride and the amount of loss the insurers are exposed to runs into thousands of crores. The effect of such adverse selections results in a burden to the insurers, thereby shooting up the premium for genuine policyholders. Insurance fraud involves trillions of dollars all over the world. Time and again, genuine policyholders have been mute spectators of the unfortunate happenings and silently suffer the effect of the frauds by paying higher premiums. In this article, we have made an attempt to present an overview of insurance frauds, their impact, and the measures adopted by the insurers to detect and prevent such frauds.

Insurance Chronicle Magazine, Insurance Frauds, White-Collar Crime, Auto Insurance Frauds, National Insurance Crime Bureau, NICB, Reinsurance Companies, Fraud Defense Network, NICB EyeQ, Insurance Industry, Controlling Insurance Frauds, Insurance Regulatory and Development Authority, IRDA.