The Ethics of Insurance Counter Fraud 

The huge growth in insurance counter fraud initiatives has resulted in a great many fraudsters being held to account. That earns a big ‘ethical tick’. Yet the ethics of counter fraud don’t stop there. There are plenty of ethical issues associated with how insurers go about identifying and responding to fraud. These are the main ethical issues for counter fraud in insurance…

  • the transparency of processes and decisions
  • the way in which performance is defined and managed
  • the boundaries between counter fraud and other functions
  • ethical leadership and the development of the right ethical culture
  • the gathering and interpretation of data
  • governance and accountability across counter fraud initiatives

The continuing success of counter fraud in insurance will depend on these ethical issues being recognised and addressed. 


Counter fraud initiatives are becoming ever more sophisticated, using data and analytics to track, identify and even predict fraudsters. And by and large, the public gives the sector their support in this. The 'honest policyholder' line has worked.

Yet that support is conditional upon the way in which insurers go about their counter fraud initiatives. The public expect honesty from the sector in return. And some practices are controversial to say the least, especially those that use data and analytics in particular ways.

This is turning the ethics of insurance counter fraud into one of the most important topics for insurers to address. In essence, an insurer who hasn't cast an ethical eye over their counter fraud operations is essentially sailing reputationally blind. And if what I'm reliably informed of is correct, I believe there are storm clouds ahead.

That's why I believe the three main ethical challenges that lie ahead for insurers in 2021/22 sit astride these three themes : claims, data and counter fraud.  

Remember that the pricing review took underwriters by surprise and resulted in their main pricing model being declared unfair. The same could happen to claims and counter fraud people. Core tenets of how fraud is investigated could be held up to regulatory, even public, scrutiny. And should this happen, and I believe it will, what senior management function holders under SMCR will be asked is: 'why weren't you asking the right questions?'


This guide provides a useful template of issues against which to assess your firm's counter fraud programme.   

Article  |  4 min read

Could this be the Achilles Heal of Insurance Fraud? 

This claims practice has the potential to really undermine the public's support for counter fraud initiatives.   


private investigators

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How far should an insurer take an investigation? 

Legal boundaries exist for how far an insurer can take its investigations. Court cases have confirmed that neither they nor their agents have carte blanche. This means that a key test needs to be incorporated into decision making. In this article, I explore proportionality and how it should be applied in, both on individual cases and within protocols and processes...

Proportionality and the Ethics of Private Investigations


Sharing Data on Claims and Fraud

Insurers are collaborating more and more in their fight against claims fraud. And there's a lot of sense in this, so long as certain ethical thresholds are maintained. In these two articles, I examine the issues raised and the problems that hit one insurance market when it went too far...

Should insurers share data to make their systems more accurate?

Warnings from South Korea - how a counter fraud initiative went wrong


Addressing an Absence of Challenge 

Insurers are expected to bring an element of challenge into their design and monitoring of projects, with counter fraud being no exception. I work with a number of insurers in such a capacity, bringing an independent and pragmatic perspective with market experience. In counter fraud, this would encompass due diligence, project planning, risk assessment and performance monitoring.   

Get in touch for an informal chat.

Article  |  3 min read

Could Ethical Nudges help reduce Insurance Fraud? 

Research has shown that ethical nudging can influence policyholder attitudes...

Ethical Nudges and their role in tackling Insurance Fraud  

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