Application fraud is a major issue for underwriters. With investment returns low, underwriting in a profitable manner has never been more important. However, the continued growth of online distribution means consumers can often immediately see how changes to their declared details affect the premium offered - usually negatively.
This creates the potential for a perfect storm. Insurers need consumers to tell the truth when they apply for insurance in order to offer an appropriate premium, yet consumers can see that telling the truth often results in a higher premium.
A recent study found up to a quarter of all insurance applications could be deliberately inaccurate. What can insurers do to help prevent this?