Sacks & Zolonz, LLP class=
Serving California
Toll Free : 800-461-0268

Report reveals that work comp fraud continues to be a problem for U.S. insurance companies

In workers compensation defense news, a recently released report from Deloitte, one of the world's premier consulting groups, made some rather intriguing findings concerning the growing incidence of workers' compensation/employee fraud over the last several years.

The report, entitled "A call to action: Identifying strategies to win the war against insurance claims fraud," indicates that workers compensation fraud comprises a rather sizeable share of the estimated $30 million in insurance fraud that occurs here in the U.S. every year.

Furthermore, the report indicated that the National Insurance Crime Bureau (NICB) discovered that the number of questionable claims submitted to property and casualty insurers rose by 19 percent from 2009 to 2011 with fraudulent work comp claims seeing a significant increase.

The authors of the Deloitte report indicate that this increase in insurance fraud can be largely attributed to the following causes: P&C insurers using a fragmented approach to address fraud, a lack of legal options, ongoing issues with existing systems/data quality, "tolerant attitudes" by consumers and a lack of qualified personnel.

The solution proffered by the report for addressing the growing problem of insurance fraud is for P&C insurers to adopt a four-pillared integrated fraud management program.

These four pillars include:

  • Development of a fraud management strategy
  • Alignment of the operating model
  • Improvement of information quality
  • Utilization of advanced technology tools and systems analytics

"While many insurers have invested resources in an effort to improve fraud management, few have taken a broad or integrated approach," reads the report. "Some companies have invested in improving data quality and adopting technology tools, but still lack the business processes, workforce competencies and organizational structure needed to act on the insights gained from data analysis."

Interestingly, the authors of the report also recommend that P&C insurers consider hiring more staff and perhaps re-establishing their in-house special investigative units.

Stay tuned for more from our workers' compensation defense blog ...

This post was provided for informational purposes only and is not to be construed as legal advice.


Risk & Insurance, "Report: Workers' comp is larger fraud area for property/casualty industry," Sept. 6, 2012

Canadian Underwriter, "Insurance fraud in U.S. a $30-billion problem: Deloitte," Aug. 20, 2012

No Comments

Leave a comment
Comment Information

Sacks & Zolonz, LLP
638 North Eckhoff Street
Orange, CA 92868

Toll Free: 800-461-0268
Orange Law Office Map

Sacks & Zolonz, LLP
400 Corporate Pointe, Suite 800
Culver City, CA 90230

Toll Free: 800-461-9246
Phone: 310-216-7778
Fax: 310-216-9552
Culver City Law Office Map