Insurance Fraud Detection Software Market Size, Share, Growth, and Industry Growth by Material Type (On-premises and Cloud) By Application (Life Insurance, Health Care Insurance, Automobile Insurance, Property Insurance and Others), Regional Forecast To 2031

Updated On: 20 November 2023

INSURANCE FRAUD DETECTION SOFTWARE MARKET REPORT OVERVIEW

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The global insurance fraud detection software market size was USD 3761.9 million in 2022 and is projected to touch USD 23725 million by 2031, at CAGR of 20% during the forecast period.

The global COVID-19 pandemic has been unprecedented and staggering, with insurance fraud detection software market experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels.

Detecting and stopping fraud connected to financial or property insurance is known as insurance fraud detection. In order to anticipate future events, it makes use of a variety of software-based techniques to examine historical trends and happenings. The program to do statistical analysis uses artificial intelligence (AI), machine learning, and conventional rule-based fraud analytics models. Organizations frequently utilize insurance fraud detection for governance, risk, compliance, governance, fraud analytics, database security, and the identification of anomalies and vulnerabilities. During the purchase, sale, or underwriting of insurance, the program also looks for suspicious behavior by an insurance provider, agent, adjuster, or customer who is trying to gain illegal advantage. As a result, it has many uses in many different industries, including banking, financial services, and insurance (BFSI), as well as in the automobile, healthcare, and retail sectors.

The selling of services by organizations, individual proprietors, and partnerships that aid in the detection and prevention of fraudulent actions involving money or insurance is the insurance fraud detection market. In order to forecast future events, several software-based techniques are utilized to examine historical trends and incidences. Organizations typically utilize insurance fraud detection for governance, risk, compliance, governance, fraud analytics, database security, and vulnerability identification.

COVID-19 Impact: Pandemic-related Disruptions Impacted Market Dynamics

The world economy was severely impacted by the coronavirus outbreak. In the first half of 2020, the overall demand for fraud detection and prevention (FDP) solutions decreased somewhat across a range of applications. Additionally, due to a lack of functioning, several commercial campaigns, expected investments, government policies, and others are on pause. Due to a growth in cybercrimes, payment fraud, insurance fraud, and other frauds, the market position for the market size in the second half of 2020 and beyond increased the adoption of fraud detection and prevention solutions. People are submitting claims through their life and health insurance for COVID-19-related medical costs. The rise in online insurance claims has given criminals more opportunity to commit fraud against government and hospital insurance claims. This is anticipated to accelerate the adoption of solutions in the public and private sectors of healthcare.

Leading market participants have implemented a variety of cutting-edge tactics to combat the rising number of fraudulent activities. The market's leading competitors are concentrating on creating cutting-edge fraud monitoring and prevention solutions which is one of the reasons for growing insurance fraud detection software market share.

LATEST TRENDS

"On-Premise Solutions to Gain Traction Over 2022-2031"

In terms of global insurance fraud detection market share in 2018, on-premise deployment method had the greatest proportion. On-premise solutions' prominence is partly attributable to the improved security and functionalities they offer over cloud-based alternatives. Despite the fact that many businesses are still heavily reliant on on-premise deployment models, the industry is still seeing a shift from on-premise to cloud models, and it is true that many businesses are prepared to spend more money on cloud. But despite these advantages, there is one crucial area that cloud computing entirely diverges from on-premises systems. Companies may utilise cloud deployment to scale up or down in accordance with user requirements, total consumption, and business development on a pay-as-you-go or pay-as-needed basis. This has led to a notable increase in the use of cloud solutions, which is likely to further accelerate insurance fraud detection software market growth throughout the projection period of 2022 to 2031.

INSURANCE FRAUD DETECTION SOFTWARE MARKET SEGMENTATION

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• By type

Depending on insurance fraud detection software given are types, On-premises and Cloud. The cloud type will capture the maximum market share through 2031.

• By Application

The market is divided in life insurance, health care insurance, automobile insurance, property insurance and others based on users. The global insurance fraud detection software market players in cover segment like life insurance, health care insurance and automobile insurance will dominate the market share during 2031.

DRIVING FACTORS

"Prevalence Of Insurance Fraud Across Sectors to Drive Growth"

One of the main elements feeling the market's growth is the rise in insurance fraud across all sectors of the economy. Systems to detect insurance fraud are frequently used to spot any attempt to conceal evidence, interpret an occurrence incorrectly, or exaggerate the magnitude of the loss. Additionally, the market is growing because of an increase in false claims, phoney medical documents, out-of-date legislation, kidnappings, fatalities, and other types of customer fraud.

As a result, businesses are increasingly utilizing artificial intelligence (AI) and Internet of Things (IoT)-enabled fraud detection solutions for automated business rules, self-learning models, text mining, image screening, network analysis, predictive analytics, and device identification, which is also fueling the insurance fraud detection software market's growth. These tools can provide quick estimating and insight delivery to expedite claim procedures. The insurance fraud detection software market size is expected to increase because of additional factors, such as the insurance industry's quick digitalization and major advancements in cyber security infrastructure.

"Technological Improvements to Foster Market Development "

One of the most well-liked industry developments for detecting insurance fraud is the advent of technology. The insurance fraud detection market outlook is expected to be shaped by the several organisations that are providing new solutions with enhanced technology to better monitor and identify insurance fraud claims for their clients. For instance, the Crawford Intelligent Fraud Detection system was introduced in December 2021 by Crawford & Organization, a US-based independent claims management company. With the help of IBM and DXC Luxoft's Financial Crimes Intelligence platform, this ground-breaking solution enhances the identification and management of fraudulent claims by fusing human experience with forensic analysis. Crawford's considerable expertise and talents are utilised in this solution, which employs AI to help clients identify and handle insurance fraud. One of the most important industry trends for insurance fraud detection is technological improvement.

RESTRAINING FACTORS

"Huge Expenses to Limit Market Potential "

The instruments needed to identify and keep an eye on fraud cost organisations a lot of money. These instruments are quite expensive, yet some companies can afford them because of this. The main barrier to the market for fraud detection and prevention is this aspect. Additionally, it is anticipated that the lack of trained workforce in the fraud detection & prevention tools may restrain the insurance fraud detection software market share during the projected period.

INSURANCE FRAUD DETECTION SOFTWARE MARKET REGIONAL INSIGHTS

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"North America to Hold Notable Share During 2022-2031"

In 2021, North America accounted for a major market share and will gain traction in the future. The regional expansion has been bolstered by the presence of important players like ACI Worldwide, Inc., BAE Systems, and Fiserv, Inc., among others. Property, casualty, and life annuities comprise the majority of the insurance market in the United States. The American government has made it mandatory for its people to purchase health and life insurance. resulting in a sizable market for the insurance industry. As a result, it may now be possible to use weaknesses to carry out fraudulent actions like processing claims. According to studies by the Federal Bureau of Investigation (FBI), insurance fraud is predicted to cost the United States more than USD 40 billion annually, which is likely to spur industry expansion.

Over the projected period, the market in the Asia Pacific region is predicted to grow at the highest CAGR, 17.0%. With the implementation of cutting-edge technologies, the businesses in the area are taking proactive steps to lower the incidence of insurance fraud. Additionally, it is projected that increased expenditure on better claims management systems and claims processing to guarantee client satisfaction and retention would fuel regional growth. Additionally, it is anticipated that increased knowledge of fraud detection techniques would increase demand for fraud detection software.

KEY INDUSTRY PLAYERS

"Market Players Focus on New Product Launches to Strengthen Market Position"

Leading players in the market are adopting various strategies to expand their presence in the market. These include R&D investments and launch of new, technologically advanced products in the market. Some companies are also adopting strategies such as partnerships, mergers, and acquisitions to strengthen their market position.

List of Market Players Profiled

• FICO
• IBM
• SAS Institute
• Experian
• LexisNexis
• FRISS
• SAP
• Fiserv
• ACI Worldwide
• Simility
• Kount
• Software AG
• BRIDGEi2i
• Perceptiviti
• Scorto
• Megaputer Intelligence
• SoftSol
• CaseWare

REPORT COVERAGE

This study examines a report with broad studies that describe the businesses in the market that have an impact on the forecasting period. By considering aspects including segmentation prospects, industrial advances, trends, growth size share, restrictions, and others, it provides a thorough analysis based on in-depth research. If the relevant market dynamics or important players change, this study may need to be modified.