National Association of Agriculture Insurers

NAAI President Korney Bizhdov presented Russia’s experience of combating agricultural insurance fraud at the international conference in Vienna

The National Association of Agriculture Insurers presented the results of combating insurance fraud in Russian agricultural insurance at the issue-related conference for European insurers. The presentation at the event was made by the President of NAAI, Korney Bizhdov.

The conference "Excellence in Insurance Fraud Prevention, Detection & Investigation", organized by the international consulting company TBM Group, was held on November 28-29 in Vienna (Austria). It brought together representatives of the largest European insurance companies, their unions and organizations responsible for combating insurance fraud in most countries of the EU. The conference was attended by representatives of the Europol Center for Europe (the European Financial and Economic Crime Centre (EFECC)), the UK Anti-Fraud Bureau, leading experts on anti-fraud insurance in Austria (Uniqa, Vienna Insurance Group), Italy (UnipoilSai Assicurazioni, Generali), Spain (AXA), Portugal (Generali), England (Prudential) and others.

The event examined modern methods of combating insurance fraud, including those based on the use of artificial intelligence and big data analysis. They discussed ways to improve methods and practices of combating insurance fraud in the context of digitalization of the European and world insurance markets, as well as taking into account the requirements of the EU General Data Protection Regulation (GDPR). Speakers noted that the various types and levels of insurance fraud and its nature are becoming more complex and diverse (i.e. emergence of new types of insurance coverage, cross-border fraud, etc.). It was emphasized that the key technologies developed and implemented in the fight against insurance fraud in Europe are robotics, machine learning and artificial intelligence. Top managers of leading European insurance groups and companies are faced with the task of developing strategic approaches and assessing the commercial consequences of using artificial intelligence in insurance activities, including in the interests of combating insurance fraud.

According to the European association of insurers Insurance Europe, in EU countries the volume of fraudulent claims for insurance payment, that is, intentional claims for payment from the insurer in the absence of insurance loss, reached, according to the latest numbers, 13 billion Euros per year. At the same time, the volume of identified claims for insurance payments based on fraud amounted to only 2.5 billion Euros in 2017.

“The information on the results achieved by the agricultural insurance industry jointly with the Bank of Russia, law enforcement and the judicial system in the fight against fraudulent activities of the farmers’ risk insurance aroused particular interest in the audience,” emphasized Korney Bizhdov, President of NAAI.

“It was the danger of insurance fraud caused by actions of organized groups in the period from 2013 to 2016 that forced one of the largest world insurance corporations to leave the agricultural insurance market in Russia several years ago,” said the President Bizhdov. “Now the situation in this field has changed. The transition to a unified agricultural insurance system, which took place in 2016, and an increase in the legal status of the high-tech methods of land remote sensing for the insurance expertise purposes since 2019, as well as the active position of NAAI in several significant processes concerning unreasonable claims of insurance payments, made it possible to qualitatively change the situation. Since 2016, the number of litigations in agricultural insurance, including unlawful claims, has been declining. ”

“Systemic protection measures of the agricultural insurance market with state support and an increase in the transparency of its procedures positively affect the attitude of reinsurance companies in protecting insurance portfolios of Russian agricultural risks,” emphasized the President of NAAI.

The European conference audience was aroused by the Russian experience in combating insurance fraud not only in the field of agricultural risk protection, but also in the industry as a whole, said Korney Bizhdov. A number of experts from European insurance companies asked the President of NAAI about the possibility of their participation in issue-related conferences – “Rubezh” and “Barrier” – which are annually held in Moscow with the support of ARIA and NAAI.

According to Federal Law N 260-FZ “On State Support in the Field of Agricultural Insurance”, within the framework of a centralized system, state support is provided for insurance of crop production, animal husbandry and commercial aquaculture risks. Since January 1st, 2016, a single all-Russian association has been operating in the agricultural insurance market with state support: the National Association of Agriculture Insurers.

In 2018, the Law “On State Support in the Field of Agricultural Insurance ...” N 260-FZ was amended, with the purpose of creating agricultural insurance conditions that are both more flexible and more diverse. The law entered into force on March 1st, 2019.