Insurance Fraud Detection Market Size and Share
Market Overview
| Study Period | 2019 - 2030 |
|---|---|
| Market Size (2025) | USD 7.17 Billion |
| Market Size (2030) | USD 17.38 Billion |
| Growth Rate (2025 - 2030) | 19.37% CAGR |
| Fastest Growing Market | Africa |
| Largest Market | Asia Pacific |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order Image © Mordor Intelligence. Reuse requires attribution under CC BY 4.0. |
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Insurance Fraud Detection Market Analysis by Mordor Intelligence
The insurance fraud detection market size stands at USD 7.17 billion in 2025 and is forecast to reach USD 17.38 billion by 2030, translating into a 19.37% CAGR. Real-time analytics, AI-powered claims automation, and cloud-native deployments are the principal forces widening adoption curves. Tier-1 carriers now process millions of transactions per second, and regulators are imposing stiffer civil penalties that make manual workflows cost-prohibitive. Asia Pacific is setting the innovation pace through mobile-first insurance models, while North America is scaling sophisticated behavioral analytics that marry telematics and identity management. Competitive intensity is shifting from point-solution accuracy to seamless ecosystem integration, enabling smaller SaaS vendors to win share from entrenched mainframe providers.
Key Report Takeaways
- By component, solutions led with 73.39% of the insurance fraud detection market share in 2024; services are expanding at a 19.62% CAGR through 2030.
- By application, payment and billing fraud captured 38.72% share of the insurance fraud detection market size in 2024, while money laundering detection is advancing at a 21.37% CAGR to 2030.
- By deployment mode, on-premise retained 67.21% share in 2024; cloud deployment is projected to grow at a 20.12% CAGR between 2025-2030.
- By end-user industry, BFSI held 43.84% of the insurance fraud detection market share in 2024; healthcare is forecast to post a 21.14% CAGR through 2030.
- By geography, Asia Pacific commanded 33.68% share in 2024, and Africa is positioned to expand at a 21.69% CAGR over the same horizon.
Global Insurance Fraud Detection Market Trends and Insights
Drivers Impact Analysis
| Driver | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
|---|---|---|---|
| Exploding digital identities | +3.2% | North America and Europe | Medium term (2-4 years) |
| AI-powered claims automation | +4.1% | North America and Asia Pacific | Short term (≤ 2 years) |
| Rising regulatory penalties | +2.8% | European Union and North America | Long term (≥ 4 years) |
| Usage-based insurance and IoT telematics | +3.5% | Asia Pacific and North America | Medium term (2-4 years) |
| Real-time payments fraud vectors | +2.9% | Global with early adoption in Asia Pacific | Short term (≤ 2 years) |
| Shift to cloud-native SaaS | +3.1% | Global with faster uptake in North America and Europe | Medium term (2-4 years) |
| Source: Mordor Intelligence | |||
Need to Effectively Manage Exploding Digital Identities
Synthetic identities are proliferating and pressuring carriers to tighten front-end verification protocols. Consumers interact with insurers through 15-20 digital touchpoints, each a potential doorway for fraudulent personas. LexisNexis Risk Solutions bolstered its toolkit by acquiring IDVerse in February 2025, adding deepfake detection that validates identity documents with 99.7% accuracy.[1]LexisNexis Risk Solutions, “LexisNexis Risk Solutions Completes Acquisition of IDVerse,” risk.lexisnexis.com Carriers now fuse device intelligence, biometric signals, and behavioral analytics to map a single customer across disparate channels, closing loopholes exploited by fraud rings.
Surge in AI-Powered Claims Automation Among Tier-1 Insurers
Leading insurers have trimmed manual reviews by up to 85% without sacrificing detection accuracy. Fair Isaac Corporation reported a 31% jump in platform recurring revenue during Q4 2024, driven largely by AI-centric deployments across 140 tier-one financial institutions.[2]Fair Isaac Corporation, “FICO Reports Fourth Quarter and Full Year 2024 Results,” investors.fico.com Natural language processing and computer vision analyze adjuster notes, photos, and video feeds in seconds, flagging staged accidents and inflated invoices before payments leave the door.
Rising Regulatory Penalties for Fraudulent Payouts
Civil monetary penalties climbed 40-60% across major jurisdictions in 2024, turning fraud detection from a cost-avoidance tool into a compliance imperative. The U.S. Federal Register now lists insurance-related violations carrying maximum fines above USD 2 million per incident.[3]Federal Register, “Civil Monetary Penalty Adjustments for Inflation,” federalregister.gov In the European Union, GDPR enforcement extends to cross-border claim investigations, forcing carriers to deploy platforms that maintain high detection accuracy while respecting data-localization rules.
Growth of Usage-Based Insurance and IoT Telematics Data
Telematics programs such as Progressive’s Snapshot collect 20-plus behavioral variables in real time, enabling predictive fraud scores that evolve continuously. IoT sensors inside commercial properties detect environmental tampering, while connected-car data exposes organized fraud rings coordinating staged incidents across regions. Carriers integrating telematics analytics report detection lift gains of more than 40%.
Restraints Impact Analysis
| Restraint | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
|---|---|---|---|
| High false-positive rates | -2.1% | North America and Europe | Short term (≤ 2 years) |
| Budget constraints at mid-tier carriers | -1.8% | Emerging markets and global mid-sized insurers | Medium term (2-4 years) |
| Data-privacy barriers | -1.4% | Europe and Asia Pacific | Long term (≥ 4 years) |
| Shortage of fraud-analytics talent | -1.6% | Acute in North America | Medium term (2-4 years) |
| Source: Mordor Intelligence | |||
High False-Positive Rates Eroding Adjuster Productivity
Some AI models flag legitimate claims in more than 30% of cases, overwhelming human reviewers and extending settlement cycles. Carriers must strike a balance between sensitivity and specificity; yet achieving <15% false positives while keeping accuracy above 85% remains difficult. Firms are layering ensemble models that cascade simple rules, supervised learning, and network analytics to reduce noise without diluting fraud catch rates.
Budget Constraints at Mid-Tier Carriers
Annual ownership costs for enterprise-grade platforms can reach USD 2 million, equating to up to 5% of premium income for smaller carriers. Rising salaries for analytics talent widen the affordability gap, leaving many mid-tiers reliant on dated rule engines. Cloud SaaS offerings with pay-per-use pricing are beginning to democratize access, but integration expenses and change-management hurdles temper uptake.
Segment Analysis
By Component: Services Gain Momentum Within Platform Ecosystems
Solutions accounted for 73.39% of the insurance fraud detection market share in 2024, reflecting the industry’s continued reliance on end-to-end platforms that combine data ingestion, real-time scoring, and case management. Services, however, are expanding at a 19.62% CAGR as carriers outsource model tuning, regulatory reporting, and third-party data orchestration. This shift indicates growing recognition that AI models require continual calibration to track emerging fraud patterns and regional rule changes. Vendors now include managed services in subscription bundles, ensuring algorithms remain current without burdening internal data-science teams.
Managed-service contracts typically cover consortium-data onboarding, model explainability testing, and periodic bias audits, all of which strengthen platform stickiness. Cloud-native specialists bundle integration expertise that connects fraud engines to claims, policy, and billing cores in less than eight weeks. Large carriers also tap services teams for custom feature engineering, while mid-tiers lean on out-of-the-box templates to close the capability gap. The insurance fraud detection market size tied to services therefore mirrors a strategic migration from one-time software sales to recurring outcome-based engagements.
By Application: Money Laundering Detection Accelerates Beyond Payment Fraud
Payment and billing fraud dominated with 38.72% of the insurance fraud detection market size in 2024, driven by the surge in digital premium collections and automated payouts. Money laundering detection is the fastest-growing application, posting a 21.37% CAGR as regulators press insurers to monitor multi-jurisdictional flows that extend beyond traditional banking channels. Claims fraud and identity theft continue steady growth, supported by image-forensics modules that flag recycled photos and manipulated metadata.
Graph analytics now map layered transfers across apparently unrelated policies, exposing shell-company networks that funnel illicit funds. AI engines score more than 500 attributes per transaction, blending device fingerprints, geolocation shifts, and crypto-wallet traces. Carriers integrating blockchain analytics report a 35% reduction in investigative cycle times compared with legacy rules. As digital wallets and real-time payments proliferate, platform vendors prioritize cross-product correlation to intercept complex schemes that span life, health, and P&C lines within the broader insurance fraud detection market.
By End-User Industry: Healthcare Emerges as the Fastest-Rising Vertical
BFSI retained leadership with 43.84% of the insurance fraud detection market share in 2024, underpinned by stringent AML and KYC mandates that require real-time monitoring. Healthcare follows with a 21.14% CAGR propelled by the explosion of medical identity theft and complex billing schemes. Voice analytics, computer vision, and EHR integration now flag upcoding and phantom-patient patterns at the point of claim intake.
Auto insurers leverage telematics such as braking force and impact vector to validate collision legitimacy, boosting detection accuracy by more than 40% versus paper-only workflows. Retail and travel insurers embed behavioral biometrics into checkout flows to catch synthetic shoppers before policies bind. Cross-industry learning is accelerating as platforms port proven models from banking to healthcare and from auto to property lines, deepening network effects across the insurance fraud detection market.
Note: Segment shares of all individual segments available upon report purchase
By Deployment Mode: Cloud Bridges Scalability and Compliance
On-premise installations retained 67.21% of the insurance fraud detection market share in 2024 because many carriers must satisfy data-sovereignty mandates. Cloud deployments, growing at a 20.12% CAGR, offer elastic compute needed for bursty transaction peaks and large-scale model training. Hybrid models join the two, keeping sensitive data behind the firewall while off-loading resource-intensive analytics to secure public-cloud zones.
Major hyperscalers have released insurance-specific blueprints that package encryption, key management, and regional compliance controls. These templates reduce deployment time from nine months to one quarter and cut capital expenditure by as much as 40%. Pay-per-use pricing aligns costs with premium growth, an attractive proposition for mid-tier and emerging-market carriers. As confidence in cloud security hardens, more core-system vendors integrate native connectors that let insurers toggle workloads between private and public environments without code rewrites, reinforcing cloud’s role in the evolving insurance fraud detection market.
Geography Analysis
Asia Pacific dominated with 33.68% share in 2024, anchored by mobile-first products and national digital-ID frameworks that streamline verification. China and India integrate social-credit scores and biometric checks, generating granular behavioral datasets that sharpen fraud-risk segmentation. Start-ups in Indonesia and Vietnam tailor edge-computing models that work offline, a necessity in rural zones with intermittent connectivity. Carriers in Japan pilot embedded insurance for smart-home devices, harvesting sensor data to pre-empt fraudulent water-damage claims.
Africa is the fastest-growing region at 21.69% CAGR. Mobile money insurance dominates distribution, and identity fraud rose 400% across key markets in 2024. Edge-deployed ML models assess fraud in under 0.3 seconds on low-power devices, an innovation now being reverse-exported to European rural insurers. Regional regulators mandate end-to-end encryption for claim data, spurring local vendors to build lightweight cryptographic libraries that align with constrained bandwidth realities.
North America combines strict regulatory oversight with pioneering adoption of behavioral biometrics. Insurers integrate sensory data from advanced driver-assistance systems to flag orchestrated accidents. Data-localization in Canada pushes hybrid deployments, while U.S. carriers leverage consortium repositories to cross-check claimant histories. Europe focuses on GDPR-compliant AI, leading to privacy-preserving techniques such as federated learning that train fraud models without raw data exchange. Digital-identity wallets under eIDAS 2.0 will soon allow pan-European claim authentication, creating new vectors for the insurance fraud detection market to standardize cross-border workflows.
Competitive Landscape
The insurance fraud detection market shows moderate concentration, with established giants jostling against agile SaaS entrants. Fair Isaac Corporation’s Falcon platform processed 2.6 billion transactions in 2024 and remains entrenched among global carriers. IBM’s z17 mainframe embeds AI accelerators that execute sub-millisecond fraud scoring, permitting high-volume carriers to keep core processing on-premise while experimenting with cloud sandboxes.[4]IBM Corporation, “IBM z17 Mainframe with AI Accelerator,” ibm.com BAE Systems’ NetReveal excels in network analytics, surfacing coordinated rings spanning life, property, and health lines.
Cloud-native challengers differentiate through rapid deployment and transparent AI. Shift Technology’s explainable interface displays risk score rationales, easing regulator scrutiny and adjuster buy-in. FRISS offers usage-based pricing that aligns subscription fees with premium throughput, attracting mid-tier and emerging-market carriers. Guidewire’s strategic partnership with Shift embeds fraud modules directly into ClaimCenter, making integration the new battleground. White-space niches include parametric crop and climate insurance, where image-satellite fusion models detect false yield claims. Blockchain-based claims assurance platforms are also emerging, promising immutable audit trails yet still seeking mainstream scalability within the insurance fraud detection market.
Insurance Fraud Detection Industry Leaders
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Fair Isaac Corporation (FICO)
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BAE Systems Inc.
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IBM Corporation
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SAS Institute Inc.
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Experian Information Solutions Inc.
- *Disclaimer: Major Players sorted in no particular order
Recent Industry Developments
- February 2025: LexisNexis Risk Solutions completed its acquisition of IDVerse, adding deepfake-resistant document authentication to its identity portfolio.
- January 2025: Fair Isaac Corporation reported Q1 2025 revenue of USD 440 million, up 15% year-over-year, with platform recurring revenue growing 31%.
- December 2024: Mastercard finalized its USD 2.65 billion acquisition of Recorded Future to expand threat-intelligence capabilities for payment fraud analytics.
- November 2024: CCC Intelligent Solutions acquired EvolutionIQ for USD 730 million, bringing AI claims analytics to workers’ compensation and disability lines.
Global Insurance Fraud Detection Market Report Scope
Insurance fraud detection software prevents, detects, and manages fraud across the enterprise, making smarter decisions, increasing return on capital, and driving business performance. The global insurance fraud detection market is defined based on the revenues generated from the solutions and services used by various end users across the globe. The analysis is based on the market insights captured through secondary research and the primaries. The market also covers the major factors impacting the market’s growth in terms of drivers and restraints.
The insurance fraud detection market is segmented by component (solution [fraud analytics, authentication, governance, risk, and compliance, and other solutions] and service), by application (claims fraud, identity theft, payment and billing fraud, and money laundering), by end-user industry (automotive, BFSI, healthcare, and retail), and by geography (North America [United States and Canada], Europe [United Kingdom, Germany, France, and Rest of Europe], Asia-Pacific [China, Japan, India, and Rest of Asia Pacific], Latin America, and Middle East and Africa). The report offers market forecast and size in USD for all the above segments.
| Hardware | Vision Systems |
| Cameras | |
| Optics and Illumination Systems | |
| Frame Grabbers | |
| Other Hardwares | |
| Software |
| PC-Based |
| Smart Camera-Based |
| 2D Imaging |
| 3D Imaging |
| Hyperspectral and Multispectral Imaging |
| Automotive |
| Electronics and Semiconductors |
| Food and Beverage |
| Healthcare and Pharmaceutical |
| Logistics and Retail |
| Other End-User Industries |
| On-Premise |
| Edge/Embedded |
| Cloud-Based |
| North America | United States |
| Canada | |
| Mexico | |
| South America | Brazil |
| Argentina | |
| Chile | |
| Rest of South America | |
| Europe | United Kingdom |
| Germany | |
| France | |
| Italy | |
| Spain | |
| Russia | |
| Netherlands | |
| Rest of Europe | |
| Asia Pacific | China |
| Japan | |
| India | |
| South Korea | |
| Australia | |
| Rest of Asia Pacific | |
| Middle East | Gulf Cooperation Council |
| Turkey | |
| Israel | |
| Rest of Middle East | |
| Africa | South Africa |
| Nigeria | |
| Kenya | |
| Egypt | |
| Rest of Africa |
| By Component | Hardware | Vision Systems |
| Cameras | ||
| Optics and Illumination Systems | ||
| Frame Grabbers | ||
| Other Hardwares | ||
| Software | ||
| By Product Type | PC-Based | |
| Smart Camera-Based | ||
| By Imaging Type | 2D Imaging | |
| 3D Imaging | ||
| Hyperspectral and Multispectral Imaging | ||
| By End-User Industry | Automotive | |
| Electronics and Semiconductors | ||
| Food and Beverage | ||
| Healthcare and Pharmaceutical | ||
| Logistics and Retail | ||
| Other End-User Industries | ||
| By Deployment Mode | On-Premise | |
| Edge/Embedded | ||
| Cloud-Based | ||
| By Geography | North America | United States |
| Canada | ||
| Mexico | ||
| South America | Brazil | |
| Argentina | ||
| Chile | ||
| Rest of South America | ||
| Europe | United Kingdom | |
| Germany | ||
| France | ||
| Italy | ||
| Spain | ||
| Russia | ||
| Netherlands | ||
| Rest of Europe | ||
| Asia Pacific | China | |
| Japan | ||
| India | ||
| South Korea | ||
| Australia | ||
| Rest of Asia Pacific | ||
| Middle East | Gulf Cooperation Council | |
| Turkey | ||
| Israel | ||
| Rest of Middle East | ||
| Africa | South Africa | |
| Nigeria | ||
| Kenya | ||
| Egypt | ||
| Rest of Africa | ||
Key Questions Answered in the Report
How large will global spending on fraud analytics become by 2030?
Total outlays are projected to reach USD 17.38 billion as the insurance fraud detection market expands at a 19.37% CAGR.
Which region currently generates the most demand for AI-powered claims screening?
Asia Pacific leads with 33.68% share, driven by mobile-first insurance models and supportive digital-ID policies.
What application area is growing fastest?
Money laundering detection shows the highest CAGR at 21.37%, propelled by stricter financial-crime regulations.
Why are false-positive rates a restraint?
Algorithms that flag legitimate claims above 30% overload adjusters, eroding productivity and delaying settlements.
How is cloud deployment changing economics for mid-tier insurers?
SaaS pricing aligns costs with premium growth, reducing ownership expenses that previously reached USD 2 million annually for on-premise platforms.
Which end-user segment is growing quickest outside BFSI?
Healthcare is accelerating at 21.14% CAGR due to rising medical identity theft and complex billing fraud schemes.
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