It cited collusion between the employees of insurers and private persons, document falsification and manipulation in citing cause of death to claim insurance benefits, as some of the reasons behind these frauds.
"The losses caused to the insurance sector are Rs 30,401 crore which is roughly 9 per cent of the total estimated size of insurance industry in the year 2011," the report said.
The total premium income of the insurance industry comprising life, non-life and health, is around Rs 3.5 lakh crore, as per the Insurance Regulatory and Development Authority ( IRDA) data.
The study was conducted by a Pune-based company Indiaforensic, which conducts fraud examination, security, risk management and forensic accounting research. It has also helped the country's investigating agencies like CBI in several high profile cases such as the multi-crore Satyam scam.
About 86 per cent of the frauds occurred in the Life Insurance segment while the remaining 14 per cent took place in the General Insurance sector (which includes risk of loss to assets like car, house, accidents, etc), it said.
According to the study, in last five years the frauds in Life Insurance sector had more than doubled (103 per cent) whereas the frauds in the General Insurance sector rose by 70 per cent.
A total of Rs 15,288 crore (Rs 13,148 cr in life insurance and Rs 2,140 cr in general) was the loss borne by the companies in 2007. In 2011, the loss was pegged at Rs 30,441 crore.
"The insurance sector is susceptible to various frauds in the country. There is an urgent need to have strict measures including setting up of a dedicated unit to detect and check frauds in the companies," said anti-fraud and money laundering expert Mayur Joshi, who is founder member of Indiaforensic.
Source : ET