As a result, the unit helped the retailer decide to initiate legal action to recover its money. The investigation also uncovered the fact that the seller was already under investigation for playing a part in an international money laundering scheme. It is this kind of intensive and aggressive attack on fraud that is needed in the insurance industry. According to the Conning study, insurers who do aggressively fight fraud could garner a significant advantage over their non-fighting competitors. By eliminating fraudulent claims entirely, the study shows, a typical property and casualty insurer could shave up to an estimated eight points from its combined ratio, or bring its average return on investment up 17 or 18 percentage points.
Similar savings are likely in the life and health sectors, says Conning.