Fraud is continuing to increase this year, in part due to the COVID-19 pandemic, according to a new survey by the Association of Certified Fraud Examiners.
The report found that 79 percent of anti-fraud professionals have seen an increase in the overall level of fraud as of November, compared to 77 percent in August and 68 percent in May. Thirty-eight percent of the respondents said in November the increase has been significant, compared to 34 percent in August and 25 percent in May.
John Beal is Senior Vice President, Analytics, Insurance, for LexisNexis Risk Solutions. He is responsible for leading the company’s insurance analytics and modeling products and services. With more than 20 years of experience in data and analytics across the insurance and financial services industries and market-leading innovations, Beal and his team develop incremental predictive uses of existing data and processes with a strong focus on developing personal and commercial lines credit-based loss models as well as new non-credit industry solutions. Prior to LexisNexis, Beal held key leadership roles at First Union National Bank in Charlotte, where he was Vice President, Credit and Market Analytics within the Quantitative Analysis Group, and at Citicorp Bankcard, where he served as Assistant Vice President, Credit Policy Department.
Paul Mang is Chief Innovation Officer at Guidewire, a provider of predictive analytics and business intelligence solutions for the P&C insurance industry. He is the former Global CEO of Analytics at Aon plc.
André is responsible for the strategy and execution of direct venture and fund investment, in addition to establishing partnerships in the reinsurance business space that generate accretive value for RGA.
With an insurance industry career spanning over 20 years, André has spent the last 17 with RGA in various roles from marketing, business and product development, venture investment and senior leadership. Since first joining RGA in South Africa in 2005, he has worked in local, regional, and international positions, most recently transitioning to venture investments in 2015. His team currently oversees a portfolio of more than 35 venture and 8 fund investments spanning the globe.
André holds a post graduate degree in Actuarial Science from the University of Witwatersrand, Johannesburg, and Fellowships with the Institute of Actuaries (FIA), the Actuarial Society of South Africa (FASSA) and the New Zealand Society of Actuaries, while being an affiliate member of the Actuaries Institute of Australia.
He regularly presents at industry and professional conferences and is an active thought leader on many current matters affecting life and health insurance industry.
Cyber fraud, payment fraud (such as schemes with debit and credit cards) and identity theft are the three top fraud schemes seeing increases, according to anti-fraud professionals.
The largest increase in observed fraud was in financial statement fraud, with 7 percent more anti-fraud professionals reported seeing financial statement fraud in November, compared to August. That could be because as companies continue to see their profits drop, they feel more pressure to cook the books.
The survey also found 77 percent of anti-fraud professionals report that investigating and preventing fraud is more challenging now, while 71 percent said detecting fraud is more challenging as a result of the pandemic.
ACFE members anticipate the fraud trend will continue, even as vaccines have begun rolling out this week in the U.S. Ninety percent of the survey respondents expect a further increase in the level of fraud over the next 12 months, with 44 percent predicting the change is likely to be significant.
Nearly half (48 percent) of the organizations polled expect to increase their investments in anti-fraud technology, and 38 percent intend to raise the use of fraud-related consultants or other external resources. Budgets for anti-fraud training and professional development are experiencing a similar increase (according to 37 percent of the organizations polled), but nearly one-quarter (24 percent) anticipate a decrease in this area. The budget component most likely to see decreases is travel for anti-fraud staff, which shouldn’t be surprising given the plunging levels of air travel in general over this past year, with 38 percent of the survey respondents expecting a reduction in funds for travel in the year ahead.
