Life insurance companies have given a project to Experian, a global data analytics company, to build a fraud monitoring framework. Earlier, IRDAI had planned to build one for general insurance but it seems that the project has taken a back seat.
The framework is expected to be ready to go live in October, said Life Insurance Council, an industry association. When fully functioned, this data repository project would help insurance companies cut losses due to false insurance claims.
"We are hopeful that the data repository with the participation of all life insurers including Life Insurance Corporation of India is going to help the industry in preventing fraud and mitigating risk better," SBI Life Insurance Co Managing Director & Chief Executive Officer Arijit Basu said.
V Manickam, Secretary General of Life Insurance Council said that the formalities to engage Experian will be completed by September end. He added that US-based LexisNexis and Credit Information Bureau (India) Ltd were also in the race to get the permission.
"Arresting fraud will not only facilitate insurers but it is good for policyholders as well. It will help in reducing premium rates as insurers need not buffer for such losses, improving operational competence and in keeping bad elements out of the system," PricewaterhouseCoopers Director, Anuraag Sunder said.
Fraud prevention, nowadays, has become a main point of concern for any insurer given the fact that any general insurer may be badly impacted in the range of around 10% premiums being lost due to fraudulent losses. To detect the duplicate claims under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), the life insurers are also closely working with Credit Information Bureau Limited (CIBIL).
Source: This article has been adapted from the article “Life insurance companies to engage Experian to build fraud monitoring framework “that appeared on 2nd September 2015 in economictimes.indiatimes.com