Insurance Fraud Detection Market Size

Insurance Fraud Detection Market Analysis

The Insurance Fraud Detection Market size is estimated at USD 5.69 billion in 2024, and is expected to reach USD 21.61 billion by 2029, growing at a CAGR of 26.01% during the forecast period (2024-2029).

The increasing number of fraud claims and their burden on insurance businesses, the need to efficiently manage large amounts of policyholder data, and improved operational efficiency to enhance customer experience are the key factors fueling the market's growth.

• The insurance industry's embrace of automation has paced the application processing, underwriting, and claims processes and opened ways to new fraud types throughout the insurance life cycle. The digital shift gave rise to digital experiences and automated premium calculation processes, opening new opportunities for fraudsters. Thus, the use of AI insurance fraud tools is growing considerably.
• The need to effectively manage vast volumes of identities plays a pivotal role in shaping the insurance fraud detection market, reflecting the industry's response to the evolving challenges posed by identity-related risks. As the insurance sector undergoes digital transformation, the large volume and diversity of identities involved in transactions, claims processing, and interactions have risen. This surge in data complexity necessitates a sophisticated approach to identity management, making it a critical market driver for insurers.
• Improved operational efficiency and enhanced customer experience represent a comprehensive approach within the insurance fraud detection market. It signifies a shift from traditional, segregated fraud prevention methods to a more integrated strategy prioritizing the insurer's internal workings and the policyholder's external experience.
• The insurance industry's awareness and comprehension of these technologies are crucial for the efficacy of fraud detection systems in the current landscape of rapid technological developments and shifting fraud strategies. However, widespread ignorance might pose a significant barrier to adopting and effectively applying advanced fraud detection technologies.
• The COVID-19 pandemic had a long-term impact on several industries, notably the market for insurance fraud detection. The insurance sector witnessed changes in fraudulent activity patterns as the world faced previously unrecognized challenges, which led to a reassessment of fraud detection techniques.
• The COVID-19 pandemic accelerated digitalization in the insurance business, providing the sector with improved instruments to fight fraud across the policy lifecycle. As per FRISS's survey, which involved 400 insurance professionals worldwide, 53% anticipated that anti-fraud technology would aid them in remaining ahead of emerging fraudulent schemes. In contrast, 52% look forward to enhanced investigator efficiency. As per a recent FRISS survey, for 59% of respondents in the insurance sector, fraud detection software is expected to enhance the loss ratio. The increased adoption of digital tools and technology, as indicated by improved tools to fight fraud, reflects the industry's response to the challenges posed by the dynamic fraud landscape during and after the pandemic.