BNamericas - The underbelly of digital insurance channels

Digital channels targeting the mass consumer market are helping insurers swell their client base without the need for traditional intermediaries – but at a cost. One cost is increased risk of fraud, global insurance fraud analytics firm FRISS said during an event in Chile outlining the results of the first fraud survey of its kind covering all Latin America. As technology develops and purchasing habits change, insurers are increasingly leveraging digital channels, allowing consumers to take out policies online, directly from an insurer, in a largely frictionless manner. The trend is forecast to continue in Latin America as insurers seek to keep costs under control, tap what is still an underpenetrated market, and stand out from the crowd. One consequence of this is the sidelining of brokers, whose detailed client knowledge can help prevent fraud, said FRISS, a Dutch firm that provides an AI-powered platform to help P&C insurers combat fraud and which carried out the survey of insurance companies.