Suspicious insurance claims have familiar characteristics. The insurers have collated these characteristics into lists to be used in claim assessments to determine whether further professional and scientific investigations are necessary. These lists are commonly referred to as “red flags” or “indicators” of fraud.
Red flags are linked to the nature of claims or the type of the insurance fraud, for example, false or inflated theft repair claims, staged accident, billing fraud, fake death claims, falsified beneficiary claims, fake disability claims, forgeries, and workers’ compensation.
When three or more of these red flags are found in the process of assessing a claim, a threshold is met for recommending further professional forensic investigation. The existence of red flags is not proof of fraud. However, it is a signal to the adjuster to request for further investigation to either prove or disapprove the fraud.
The role of fraud investigators is therefore critical to the insurance sector. The investigators are responsible for collecting, processing and analyzing evidence of insurance fraud allegations. They help ensure that the proved suspicious fraud claims are rejected, and suspects of such fraud are prosecuted successfully.
The Insurance Act, Cap 487, Laws of Kenya prescribes that Insurance Investigators must be licensed. Therefore, insurers, and other stakeholders in the industry such as advocates, auctioneers, adjusters, and the general public should consider engaging licensed investigators to aid in proving or disapproving fraud.
At Riskhouse International, we are licensed by the Insurance Regulatory Authority (IRA). We have a team of professional investigators who utilize forensic tools, techniques and scientific analysis to investigate fraud. We also conduct awareness and readiness training on the red flags to stakeholders in the insurance industry.