Subrogation: An insurance carrier may reserve the "right of subrogation" in the event of a loss. This means that the company may choose to take action to recover the amount of a claim paid to a covered insured if the loss was caused by a third party.
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Professional indemnity insurance is an essential safeguard for practitioners and businesses that provide expert advice or services. This type of insurance helps to protect professionals against legal costs and claims for damages from an act, omission, or breach of professional duty in the course of their work. For Australian professionals, where litigation is increasingly common, it's a pivotal component of risk management. - read more
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Professional indemnity insurance is an essential safeguard for practitioners and businesses that provide expert advice or services. This type of insurance helps to protect professionals against legal costs and claims for damages from an act, omission, or breach of professional duty in the course of their work. For Australian professionals, where litigation is increasingly common, it's a pivotal component of risk management. - read more
The professional services industry has undergone a significant transformation in recent years, largely due to the integration of digital technology into everyday business operations. From cloud computing to mobile applications, the digital landscape for professional practices has expanded, offering new avenues of efficiency and connectivity. - read more
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If you're an Australian consultant, you understand that your advice is a valuable commodity. But with that value comes responsibility, and a level of risk that you could be held liable if your guidance results in financial loss to a client. This is where professional indemnity insurance comes into play, serving as a vital shield, providing protection and peace of mind for both you and your clients. - read more
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In an evolving battle against growing fraud, the insurance sector is turning to advanced technology as a solution.
Despite the continuous advancements in fraud prevention, the creativity of scammers puts pressure on insurers to leverage smarter resources.
The Insurance Council of Australia (ICA) reports the insurance industry is burdened by an estimated $400 million in undetected fraudulent claims in 2023. Such costs inevitably burden consumers through higher premiums and collateral economic impacts.
A report from the US National Insurance Crime Bureau cited a staggering $9.2 billion in inflated disaster claims paid out in 2022 due to scams. ICA has reacted by empowering a specialist fraud prevention team under the leadership of former cybercrime detective Andrew Gill to crack down on organised scam operations.
The rising concern is the technological sophistication scammers employ. A new phenomenon known as “shallowfake” scams, highlighted in a recent Allianz warning, shows fraudsters manipulating images using simple tools like Photoshop to simulate damages, complicating genuine claim approval processes.
Diving deeper, the advent of generative artificial intelligence (GenAI) could complicate issues further. From augmenting photographs to creating realistic phishing attacks, GenAI is proving to be a powerful tool for bad actors. As Shift Technology's head of global partnerships, Drew Whitmore explained, fraudulent claims are reported 58% more often by scammers. “The severity of those claims is over eight times more than the standard,” he noted, demonstrating the intensity of the threat.
Social media platforms are not exempt from misuse, with fraudsters mining public information to craft credible yet deceitful claims. Abhi Bhola from EXL expressed that the era of easy access AI is contributing to diverse fraudulent approaches, warning, “Better AI, which is easily available, is fueling the threat.”
Fortunately, artificial intelligence offers a defense mechanism for insurers. By processing and analyzing vast datasets in real time, AI helps insurers promptly detect abnormalities and nefarious activities before they intensify. Collaborations such as the one between EXL and Shift Technology aim to enhance the precision of fraud detection across the sector.
Preserving the integrity of the insurance ecosystem requires proactive cultural transformations, according to Whitmore, If insurers cannot do that, leveraging any advanced technology will not help. He emphasises the necessity of moving from a reactive stance to forecasting and preemptive action.
The industry anticipates more regulatory cooperation in data-sharing strategies to foster effective anti-fraud measures. As Whitmore emphasized: that Fraudsters are sharing their information, and the industry needs a framework to do this, too.
By harnessing AI and building supportive industry partnerships, insurance companies can expect to mitigate fraudulent losses, protect their consumers’ interests, and uphold their role as trustworthy societal figures, thereby exemplifying positive conduct within their communities.
Published:Thursday, 17th Oct 2024 Source: Paige Estritori
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