This article highlights some salient points regarding fraud exposure for insurers in developing Asian markets. But what I find very interesting about this article is that many of the issue described are the same issues faced by insurers in more mature markets. Take this quote, for example: “Insurers focus their investments on marketing and underwriting departments as opposed to the claim area.” Sound familiar?
Other big challenges: regulatory issues, increased tolerance of and exposure to fraud, lack of established best practices. Sounds like all the same issues that face insurers in any market. The benefit of operating in an emerging market is that leading companies can set precedent, develop the best practices and drive regulatory changes. From a fraud detection standpoint, it’s critical that these companies focus their efforts early on and do not set a negative precedent – that fraud is simply a cost of doing business – like we’ve done in the US and other established insurance markets. Over the last couple decades, we’ve been trying to dig ourselves out of that hole, and the process is proving costly and very cumbersome. My suggestion to insurers entering emerging markets: make anti-fraud programs a key component of your strategy so you don’t have to play catch-up later.