Insurance fraud has been with the insurance industry since it began. It is seen as a "victimless" crime where nobody personally suffers a loss, but huge wealthy insurance conglomerates make extra payouts from their wealth funds. An Insurance Council fraud survey in 2005, found 13% of respondents said that insurance companies can easily afford to pay.
The reality is that insurance fraud has to be paid for by honest policyholders. Insurance fraud is a crime and a cost to our community and every policy holder.
Most insurance fraud occurs at claim time, through claims for:
events/losses that didn't happen
staged losses - for example arson, vehicle theft
In addition, a large number of fraudulent claims occur for non-disclosure of information that insurers require, in order to match the correct premium to the risk - Insurance Council of New Zealand.
Paragon has a Nationwide coverage of Insurance Fraud Investigators.