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Insurance fraud costs $308.6bn annually, coalition reports

28th November 2022 - Author: Kane Wells

The Coalition Against Insurance Fraud has released a report estimating that annually, insurance fraud costs the US $308.6 billion.

In 1995, the Coalition estimated this number at $80 billion, though at the time, only the property & casualty insurance line was considered.

The present report addresses all lines of insurance and is also adjusted for inflation, unlike the one in 1995.

The report additionally notes that in 1995 the internet was in its infancy and the estimate, therefore, did not account for new forms of cyber insurance fraud that are impacting the US currently.

The Coalition explains that applying an inflation calculator alone increases the $80 billion figure to $155 billion. Meanwhile, the remaining additional $156 billion in estimated insurance fraud includes additional lines of insurance, notably healthcare, workers compensation, and life & disability insurance.

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However, the Coalition does observe that the actual cost of insurance fraud on American citizens is impossible to measure accurately, noting that the report seeks to use the best available data and resources to estimate the economic damage insurance fraud causes every year in the US.

The Coalition highlights the key strategic partners who advised, peer-reviewed, and analysed this report, which included the International Association of Special Investigation Units, the National Insurance Crime Bureau, the American Property & Casualty Insurance Association, and the Insurance Information Institute.

To ensure a thorough and independent report, The Coalition states that all data collection, analysis, and study documents were prepared by the Colorado State University Global White Collar Crime Task Force led by Dr Michael Skiba.

It adds that the team of PhD candidates at CSU compiled data from the most reliable sources available for each line of insurance. Such sources include the FBI, respected trade associations, and regulatory reporting filings.

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