Property and casualty insurance fraud cost carriers about $29 billion last year, according to the New York-based Insurance Information Institute. The trouble is that's just part of the picture. It's safe to say the number would increase when you count fraud from life and health.It's also safe to say insurance fraud has been with us for a long, long time. Has detection improved? Does detection even matter if the perpetrators aren't prosecuted? Are insurers benefiting from fraud detection and prevention? And, how are they going about it?

According to the Insurance Information Institute, in the mid-1980s the rising price of insurance, particularly auto and health insurance, combined with the growth in fraud committed by organized criminals, prompted insurers to reexamine the issue. Gradually, insurers began to see the benefits of strengthening anti-fraud laws and imposing more stringent enforcement as a means of controlling escalating costs. They found ready allies among those who had been adversely affected by fraud.

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