What are the 7 main types of insurance fraud and how to identify them?

O digital certificate It is a relevant resource for protecting digital operations, but prevention also depends on processes capable of recognizing the types of insurance fraud Before they cause harm. Insurance fraud is the deliberate attempt to gain an unfair advantage in the contracting, use, sale, underwriting, or activation of a policy, affecting insurers, brokers, contracting companies, and consumers.

The problem is not limited to the improper payment of compensation. Fraud can compromise risk analysis, increase response time, generate legal disputes, raise operational costs, and damage trust between the insurer, business partner, and end customer.

Summary

• Insurance fraud can occur during the contracting process, claims process, internal operations, and across various branches of insurance, such as life, auto, property, and transportation.
• The most common signs involve inconsistencies in registration information, conflicting documents, inaccurate reports, repeat offenses, and unusual haste in hiring.
• Identity validation, document verification, audit trails, and KPIs help reduce risks.
• Prevention must combine technology, clear processes, governance, and human analysis.

Quick facts

• The report CNseg on fraud This report compiles the Quantification of Fraud in the Brazilian Insurance Market in 2024.
• A integrity of Susep 75% of the planned actions were completed on schedule between March 2023 and July 2024.
• O FBI on fraud He estimated that non-medical insurance fraud costs around US$30 billion per year in the United States.

What characterizes insurance fraud?

Insurance fraud occurs when a person or organization distorts, omits, or fabricates information to obtain undue economic advantage. According to NAICIt may involve the insurer, agent, regulator, or consumer, and may occur during the purchase, use, sale, or underwriting of insurance.

This definition is broad because fraud doesn't only occur at the time of a claim. It can begin before the policy is issued, when someone provides false information, declares a lower risk than the actual one, or presents documents that don't correspond to the situation being analyzed.

For legal and operational teams, the challenge lies in distinguishing between error, disorganized documentation, and intentional manipulation attempts. Therefore, prevention needs to consider evidence, history, behavior, documents, and traceability at each stage.

Main types of insurance fraud

The types below frequently appear in insurance operations and require attention from client onboarding to claims analysis. Classification helps organize internal controls, define alerts, and guide auditing.

Type of fraud	How it happens	warning signs
1. Fraudulent hiring	False or omitted information in the proposal.	Discrepancies in registration data, inconsistent documents, and a declared risk lower than the actual risk.
2. False or exaggerated accident	Non-existent event, simulated event, or event with exaggerated damages.	Inaccurate account, lack of evidence, and items inconsistent with the event.
3. Internal fraud	Participation of employees or partners	Non-standard access, atypical approvals, and unjustified changes.
4. Asset fraud	Damage caused or exacerbated to insured property.	Recent hiring history, weak reports, and incomplete documentation.
5. Automotive fraud	Simulated theft, combined collision, or pre-existing damage.	Inconsistent bulletins, recurring workshops, and discrepancies in photos.
6. Transportation fraud	Loss, damage, or theft handled within the logistics chain.	Incompatible route, broken seals, and lack of proof of purchase.
7. Fraud during life	Omission of conditions, suspicious beneficiaries, or falsified documents.	Recent hiring, conflicting medical data, and weak powers of attorney.

Fraudulent hiring

Fraudulent contracting occurs when the insured or intermediary presents false data, omits relevant information, or manipulates documents to obtain approval, reduce premiums, or contract coverage that would not be granted under the same conditions.

In business insurance, this can involve a company registration number (CNPJ) without actual operations, an address inconsistent with the business activity, declared revenue without supporting documentation, or conflicting partner information. In personal insurance, it can appear in information related to health, profession, use of the asset, or risk history.

According to Susep on fraudOmissions during the contracting process or intentional aggravation of risk may constitute fraud and lead to non-payment of compensation.

False or exaggerated accident

A false claim is one in which the alleged event did not occur. An exaggerated claim, on the other hand, starts from a real event but includes greater damage, nonexistent items, or values ​​inconsistent with the proven loss.

This type of fraud usually requires comparison between documents, photos, invoices, expert reports, the insured's history, and the chronology of the event. The analysis must examine whether the account is consistent, whether the evidence is substantiated, and whether there is a repetition of patterns in previous policies.

internal fraud

Internal fraud involves employees, representatives, service providers, or partners who use privileged access to manipulate processes. It can occur through altered registrations, improper approvals, deletion of evidence, irregular issuance of documents, or misappropriation of funds.

This risk is significant because the fraudster knows the controls and may try to circumvent them. Therefore, segregation of duties, access logs, approval limits, and periodic review of permissions are relevant measures to reduce vulnerabilities.

In digital operations, the identity validation It helps to reinforce the entry phase, while the digital authentication It contributes to preserving documentary evidence during the workflow.

Property, automotive, transportation, and life fraud.

In property fraud, the risk lies in damages caused or amplified to insured properties, equipment, inventory, and assets. The investigation should examine the time of contracting, maintenance history, invoices, photos, reports, and the consistency between the damage and the narrative.

In automotive fraud, cases can involve staged collisions, simulated theft, inclusion of old damage, or misuse of the vehicle. In transportation, alerts include broken seals, unjustified routes, lack of documentation, and discrepancies between declared cargo and transported cargo.

In life insurance, care should be taken regarding health declarations, medical documents, beneficiaries, powers of attorney, the chronology of the policy's registration, and any inconsistencies in registration information. The analysis should not presume fraud, but it must require documentation proportional to the risk.

How to identify the different types of insurance fraud?

Identifying types of insurance fraud depends on a combined analysis of data, documents, behavior, and history. No single sign confirms fraud, but a combination of warning signs should trigger a more careful analysis.

Stage	What to check	Recommended control
REGISTRATION	CPF (Brazilian individual taxpayer registration number), CNPJ (Brazilian company taxpayer registration number), address, phone number, email, and representatives.	Registration check and identity verification
Documents	Integrity, date, signature, origin, and consistency.	Document analysis and evidence recording.
Anual Subscription	Authorship, consent, date, and file integrity.	Electronic or digital signature with audit trail.
Left	Report, evidence, expert opinions, photos and history.	Risk analysis and review checklist
Incident Handling	Access, changes, approvals, and exceptions	Logs, segregation of duties, and periodic sampling.

An efficient routine should also consider digitally signed documents. Resources such as signature verifier, digital stamp e hash function They help to verify integrity, authorship, and any subsequent alterations.

Check out these related articles as well:

• Document fraud requires validation controls before signing and filing.
• Document analysis reduces inconsistencies in contracts, registrations, and approval processes.
• Fraud risk analysis organizes alerts, evidence, and decision criteria.

Indicators for monitoring suspected fraud.

In addition to case-by-case checks, companies that work with contracts, policies, documents, and signatures need to monitor indicators. KPIs show whether the operation is more exposed, whether the screening process is slow, or whether a particular channel is concentrating inconsistencies.

KPI	What does it measure?	How to use
Suspicious claims rate	Percentage of claims sent for special analysis	Identify products, regions, or channels with the highest risk.
registration inconsistencies	Volume of discrepancies in customer data	Improve input validation and reduce rework.
Analysis time	Time between case opening and decision.	Balancing safety, experience, and operational efficiency.
Recidivism	Repetition of alerts by customer, partner or provider.	Review relationship, access, and approval criteria.
Exceptions approved	Cases released outside the standard workflow.	Audit decisions and strengthen governance.

These indicators gain strength when associated with audit trails. In digital documents, the signature reliability It depends on evidence such as date, IP address, authentication, file integrity, and a record of the actions taken in the process.

How does technology help in prevention?

Technology doesn't eliminate the need for human analysis, but it reduces operational gaps. It standardizes steps, records evidence, limits manual changes, and creates a more reliable basis for auditing and decision-making.

In insurance workflows, this can involve identity validation, biometrics, document analysis, electronic signatures, digital certificates, contract automation, permissions management, and system integration. The goal is to reduce gray areas and make each step verifiable.

A signature with certificate This can be useful for documents that require a higher level of security, while the subscription platform It helps to centralize the workflow, reduce file dispersion, and preserve the acceptance history.

It is also advisable to connect fraud prevention to compliance routines. This way, documents, consents, contracts, and approvals no longer depend solely on random emails, screenshots, or files without version control.

Preventing fraud requires process, evidence, and governance.

Understanding the types of insurance fraud is only the first step. Reducing risk depends on consistent registration, identity validation, document verification, traceable signatures, auditing, and indicators that show where the operation needs reinforcement. For flows that require more security and validity, ZapSign explains how it works. Certificate Authority.

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