A Kenyan insurance fraud scoring system: life insurance
Date
2015
Authors
Ong' ang'o, Josephat Auma
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
The aim of this study was to determine claim characteristics that are correlated with the occurrence of insurance fraud and to, additionally, developing a fraud scoring model. The model's purpose is to provide a probability score on the possibility of a claim being fraudulent. The scope of this study was the Kenyan insurance sector particularly life insurance business with two types of cover: funeral plans and personal accident cover. The data used is honest/paid out claims and simulated fraudulent claims for a period of seven years (2007 - 2013). The findings of this study are that some characteristics such as the claim amount, and the reporting delay are significant indicators of the presence of fraud in a claim. The fraud scoring model developed serves as a handy tool in the detection of fraudulent cases with nearly 90% accuracy depending on the probability threshold chosen by the insurance company.