Fraudsters Shift Focus to Insurance Industry During First Half of 2022
TransUnion released a quarterly fraud analysis revealing significant trends in digital fraud. In the insurance sector, suspected fraud attempts soared by 159% year-over-year, continuing a trend of rising fraud rates. Despite this, overall suspected digital fraud attempts across various industries decreased by 14% during the same period. The report highlighted growing concerns about first-party application fraud in insurance as consumers manipulate information for better policy terms. Interestingly, U.S.-based insurance fraud grew at a lower rate (22%) than the global average.
- Suspected digital fraud in insurance rose significantly by 159% year-over-year.
- TransUnion's insights are based on robust transaction intelligence.
- Overall suspected digital fraud attempts decreased by 14%.
- Insurance fraud growth in the U.S. was only 22%, lower than global trends.
TransUnion releases quarterly global and U.S. fraud analysis
CHICAGO, Aug. 10, 2022 (GLOBE NEWSWIRE) -- For the second consecutive quarter, the rate of suspected global digital fraud attempts in the insurance industry experienced the greatest rise on a year-over-year basis, increasing
TransUnion came to its conclusions about fraud against businesses based on intelligence from billions of transactions and more than 40,000 websites and apps contained in its flagship identity proofing, risk-based authentication and fraud analytics solution suite – TransUnion TruValidate™. The percent or rate of suspected digital fraud attempts are those that TruValidate customers either denied or reviewed due to fraudulent indicators compared to all transactions that were assessed for fraud.
Industries seeing the largest declines in the rate of suspected digital fraudulent activity from Q2 2021 to Q2 2022 included gaming, travel and leisure, and retail. TransUnion only observed increases in insurance and logistics during this time period. For transactions originating from the U.S., TransUnion also only observed increases in the rate of suspected digital fraud in insurance and logistics year over year. However, the insurance increase was much smaller than globally, rising
First-party application fraud was the top insurance-focused fraud impacting that industry. This type of fraud involves fraudulent applications containing intentionally inaccurate or manipulated information provided by the policyholder with the intention of receiving certification, lower rates or better terms for a policy/contract.
“We have observed interesting trends in the first half of 2022 with suspected fraudulent activity in the insurance industry continuing to be elevated during the first six months of the year,” said Shai Cohen, senior vice president of global fraud solutions at TransUnion. “In recent years, we’ve seen fraudsters shift their industry focus each quarter. At this time, we believe the insurance industry is seeing more ‘soft fraud’ because some consumers may be representing their policies incorrectly in an effort to save money, especially in a high inflation environment that places more pressure on their wallets.”
Suspected Fraud Attempts Shift to New Industries Globally
| Industry | Rate Change from Q2 2021 to Q2 2022 |
| Insurance | |
| Logistics | |
| Communities (online dating, forums, etc.) | - |
| Telecommunications | - |
| Gambling | - |
| Financial Services | - |
| Retail | - |
| Travel & Leisure | - |
| Gaming | - |
Shifts in U.S. Fraud Mostly Resemble Global Trends
Overall, the rate of suspected digital fraud across all industries decreased nearly -
While insurance and logistics were the only industries to see increases, the types of fraud were much different. Whereas insurance focused on application fraud, logistics was dominated by shipping fraud. This is a type of fraud where a buyer spoofs a shipping address or a seller receives payment for goods or services, but never ships to a buyer.
Digital fraud continues to be a constant in the lives of many U.S. consumers. TransUnion’s latest Consumer Pulse study found that nearly four in 10 (
“For industries experiencing stabilization of fraud instances, the focus has been identifying more of the good transactions and customers to allow them to pass with less friction,” said Sean Donnelly, senior vice president and go-to-market global fraud solutions at TransUnion. “Strong fraud and authentication practices decrease false positives and focus fraud-fighting resources on the minority of interactions that warrant scrutiny. By reducing the pool of manual reviews and customer interrogations, organizations can dramatically reduce costs, increase revenue, and improve the overall customer experience.”
For worldwide and regional breakdowns around how much the suspected digital fraud attempt rate recently changed, what types of fraud are most prevalent in certain industries and more, please download the infographic.
About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing an actionable picture of each person so they can be reliably represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good®.
A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people.
http://www.transunion.com/business
| Contact | Dave Blumberg TransUnion | |
| dblumberg@transunion.com | ||
| Telephone | 312-972-6646 |
FAQ
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