Insurance Fraud Detection Market To Reach $19.6 Billion By 2030

Insurance Fraud Detection Market Growth & Trends

The global insurance fraud detection market size is expected to reach USD 19.6 billion by 2030, registering to grow at a CAGR of 23.2% from 2024 to 2030 according to a new report by Grand View Research, Inc. Detecting and preventing fraudulent activities is a global challenge for insurers. However, the emergence of advanced solutions such as the use of automated business rules, self-learning models, text mining, predictive analytics, image screening, network analysis, and device identification is expected to deliver actionable insights to improve claims processes. As a result, insurance organizations are adopting fraud detection solutions that not only recognize the genuine claims process but also reduce the number of false positives.

The prevention and detection of fraud capabilities are increasing with the growing awareness of perpetrators and sophisticated crimes. Global concerns about the ever-increasing cases of insurance frauds coupled with sophisticated organized crime, have signaled a need for coherent action by all insurance companies. As per a research conducted by the Federal Bureau of Investigation (FBI), the total estimated cost of insurance fraud in the U.S. is expected to be more than USD 40 billion per year. As a result, in the U.S., it has led to an increased premium of approximately USD 420 to 700 per year for the average earning family. Similarly, according to the Association of British Insurers in the U.K., insurer unearthed more than 113,000 fraudulent claims and 449,000 dishonest insurance applications, valued at USD 1.3 billion. Thus, to curb fraudulent claims coupled with the various stringent regulations set by the government, enterprises are expected to adopt these solutions in the near future. These solutions are expected to enable an enterprise to identify fraudulent activities with higher speed and accuracy, thereby improving the consumer experience by realizing fast payouts.

In the insurance sector, fraudulent activities are primarily categorized as criminal and cultural. In criminal type, professional perpetrators habitually try to identify a weak system to attack. While in cultural type, a genuine claimant is opportunistic by exaggerating a claim. With the help of data analytics, insurance companies can analyze and detect the possibility of fraudulent activities. The user can enter data, and claim applications are automatically given a score to indicate the likelihood that scam has occurred. Thus, the use of predictive modeling can potentially produce a quantified score that helps a company to understand the propensity of a scam. Monitoring the arrived score through the use of advanced solutions is expected to show more accurate and effective results than that of traditional fraud detection methods. However, relying solely on technology for suspecting the fraudulent activities to be flagged is expected to be a key challenge for the insurers. Thus, to overcome such challenges, analysts are required to initiate immediate action and follow appropriate measures to help the company reduce losses.

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Insurance Fraud Detection Market Report Highlights

• Based on component, the solutions segment dominated the market accounting for a revenue share of 63.7% in 2023. The growth of this segment is mainly driven by increasing adoption of fraud detection software, which potentially helps in understanding the process of reducing false claims, defrauding insurance processes, and quickly responding to suspected fraudulent activities.

• The on-premise deployment held the largest revenue share of global industry in 2023. On-premise fraud detection solutions immediately assist businesses in identifying and alerting possible fraudulent risks.

• The large organization segment dominated the global market for insurance fraud detection in 2023. Emergence of Artificial intelligence (AI) and predictive analytics have transformed the future of numerous industries, providing substantial competitive benefits to organizations utilizing these advancements.

Insurance Fraud Detection Market Segmentation

Grand View Research has segmented the global insurance fraud detection market based on component, deployment, organization, and region:

Insurance Fraud Detection Component Outlook (Revenue, USD Million, 2018 - 2030)

• Solutions

• Services

Insurance Fraud Detection Deployment Outlook (Revenue, USD Million, 2018 - 2030)

• Cloud

• On-Premise

Insurance Fraud Detection Organization Outlook (Revenue, USD Million, 2018 - 2030)

• SMB

• Large Organization

Insurance Fraud Detection Regional Outlook (Revenue, USD Million, 2018 - 2030)

• North America

  • U.S.

  • Canada

  • Mexico

• Europe

  • Germany

  • UK

  • France

• Asia Pacific

  • China

  • Japan

  • India

  • South Korea

  • Australia

• Latin America

  • Brazil

• Middle East and Africa (MEA)

  • Saudi Arabia

  • UAE

  • South Africa

List of Key Players in Insurance Fraud Detection Market

• IBM

• SAS Institute Inc.

• FICO

• LexisNexis Risk Solutions

• Oracle

• Capgemini

• DXC Technology Company

• FRISS

• BAE Systems

• Experian Information Solutions, Inc.