Bank of Russia estimates level of fraud in online insurance
An expanded practice of remote conclusion of insurance contracts has intensified the activities of illegal companies and intermediaries. Moreover, illegal actions are most often committed when concluding electronic compulsory motor third-party liability insurance (OSAGO) contracts, and fraudsters sell policies with false information using modern technologies, according to the regulator’s report.
As estimated by the Bank of Russia, the damage from illegal activities when concluding electronic OSAGO contracts totals minimum 4.2 bln Russian rubles annually. This includes the losses of both car owners due to the misappropriation of their funds by fraudsters and insures due to lost insurance premiums.
The report analyses the main reasons for the development of cyber fraud in the insurance business and also describes the measures for combating unfair practices in online insurance.