Indian insurance companies lose nearly ₹30,000 crore annually to insurance fraud
—a staggering figure. When you consider that India’s insurance penetration rate is just 3.7%, far below the global average, this loss becomes even more alarming. Insurers lose 8-10% of their revenue to fraud each year, yet they thoroughly investigate only about 1% of fraudulent claims . This issue persists due to significant gaps in current fraud detection and investigation practices.
While checks are in place to control some types of fraud, the more sophisticated schemes require highly coordinated efforts between fraud control units (FCUs), field investigators, and sometimes even local authorities. However, FCUs often lack the resources and infrastructure to handle the sheer volume of investigations efficiently. As a result, scammers can exploit weaknesses in the system, allowing many fraudulent transactions to slip through the cracks.
This highlights the urgent need for a comprehensive fraud investigation system that can aid FCUs with more efficient and streamlined field investigation to combat the evolving threat. In this article, I’ll explore the key challenges insurers face in tackling fraud and discuss potential solutions, including the role of artificial intelligence and optimizing field operations to stay ahead of the fraud curve.
The Challenges of Manual Investigation Processes
Insurance companies in India are no strangers to the inefficiencies that plague their investigation processes. Unfortunately, the pace at which fraud schemes are evolving—becoming more sophisticated and complex—is outstripping the ability of fraud control units to keep up. Many insurers are still relying on outdated, manual processes and legacy systems, which only serve to slow down their response times further and reduce their effectiveness.
The growing challenges in fraud investigation are driven by several key factors:
1. Heavy reliance on manual processes: Manual documentation and paperwork make investigations slow and cumbersome. Even relying on spreadsheets, web portals, or WhatsApp for data sharing increases errors and adds complexity.
2. Limited transparency and tracking: Without real-time tracking and clear visibility into the investigation process, insurers leave open many blind spots, leading to potential frauds slipping through the cracks.
3. Vendor collaboration complexities: Lack of streamlined communication channels with external surveyors and investigators results in misalignment in gathering crucial data and high turnaround time (TAT)
4. Data consolidation challenges: Historic case data often resides in disparate, siloed systems that lack integration, leading to gaps in the ability to track and monitor recurring fraudulent behaviors over time.
5. Lack of data-privacy: Current processes inevitably expose sensitive policyholder and investigation data to unauthorized access, increasing the risk of misuse, legal penalties, and loss of customer trust.
These manual investigation workflows and outdated practices are creating a perfect storm for inefficiency and mistakes. These gaps in the system not only slow things down but also give fraudsters the opportunity to exploit weaknesses. It is clear that the industry urgently needs smarter, more efficient investigation systems to close these gaps, reduce errors, and keep pace with evolving fraud tactics.
Leveraging AI and Automation for Investigation Efficiency
In the quest for a more efficient and comprehensive system, it is widely recognized that AI-assisted technological transformation is needed to overcome the challenges in fraud control. Artificial intelligence has already had a significant impact on various sectors, and its potential in insurance fraud detection is vast and untapped. With a sophisticated AI system, insurance companies can quickly and precisely identify and address fraudulent activities, thereby reducing the time, resources, and financial burdens associated with combating fraud.
This is where fraud control systems like the Kriyam.ai Investigation Platform come in. By tapping into the power of artificial intelligence and integrating smart automations into the workflow, it doesn’t just streamline operations—it supercharges them.
Here’s how Kriyam.ai is revolutionizing the investigation process:
1. Paperless Operations: Digitizes every step of the investigation process through web and mobile apps, eliminating physical document handling and minimizing errors.
2. Centralized Case Monitoring: Offers all case data consolidated into a single pane of view with AI-enabled insights and anomaly detection, enabling insurers to monitor investigations effectively.
3. AI powered Workflows: Utilizes artificial intelligence and rule-based automations for assigning cases to investigators, face match and ID verification, intelligent data enrichment, and auto-report generation.
4. Efficient Vendor Collaboration: Centralizes vendor interactions, providing tools for case assignment, workflow management, and reports with real-time updates and performance tracking.
5. Privacy-aware Data Management: Implements robust encryption, access control, and compliance mechanisms to safeguard sensitive policyholder information and investigation data from unauthorized access and misuse.
The result? Enhanced accuracy, fewer errors, and a 3x boost in field operation productivity. The platform helps insurers resolve cases faster during pre-issuance and claims, reducing average investigation time by at least 25%. It saves investigators over 12 hours per week on manual data entry and reporting, allowing them to focus on detailed investigations and cross-checks.. This not just helps FCUs to get more investigations done faster but it also proves beneficial for genuine customers who enjoy an 80% reduction in rejections due to enhanced data integrity and robust documentation that supports underwriting and claims decisions.
Unlock Efficient Fraud Control with AI-powered Insurance Investigations
Minimizing risk, especially through preventing frauds, is crucial in the insurance industry, where managing potential losses can make or break a business. Having the right tools in place to streamline investigations is key to quickly spotting and responding to fraudulent proposals and claims while ensuring legitimate ones are processed without delay.
An AI-powered investigation platform like Kriyam.ai is the key to combating fraud and saving crores in losses. With Kriyam.ai, insurance investigations become faster, more accurate, and fully secure—helping insurers reduce risk, improve profitability, and maintain a competitive edge.
By: Suvajit Sengupta , Chief Technology Officer, Kriyam.ai, (A product of GEOGO Techsolutions)
