When hi-tech frauds happen in banking sector, insurance isn’t far behind

I got a call four days back from someone who claimed to be from the insurance council. He told me that my existing policies could be converted into a ‘mobile-policy’ which could be redeemed at any ATM of my choice for ‘instant loans’. I was even sent a link to an insurance website with an incorrect spelling that claimed to issue ‘instant mobile loan policies’.

The insurance sector which primarily sells through agents on the offline model is falling victim to new kinds of fraud. Tab-based policies are being intercepted and even as money gets deducted from the account, the policy is never bought.

Hackers are also getting smarter by the day. On one hand chatbots are trying to make insurance buying and selling simple, while on the other, those skilled in technology are using it as a medium to cheat innocent customers.

A friend at a bank recounts an incident where a fraudster managed to redirect a genuine customer from their website to a phishing website by making them click on a popup that was built over their chatbot. So when the customer prompts an embedded chatbot to assist them in a sale process, hackers use technology to subvert the system and get prospective policyholders to share personal bank account details.

Similarly, phishing websites are created that have the same look and feel of the original company’s registered website. Depending on the browsing history of a customer that is gauged through cookies stored in the system, hackers decide on which would be the best way to con the customer.

While the banking sector has seen its share of technology-related frauds including phishing, card cloning and devices that jam ATMs, its distant cousin, the insurance sector, may not be left far behind.

Probably a lot of research goes into the need-analysis of a customer by such fraudsters, sometimes even more than what an insurance company would itself.

Further, customers are also regularly asked to surrender their policies to avail ‘special bonuses’. When you click on that link, all data stored is captured by the hackers. Former employees, including those in technology teams of insurance companies are aware of circumnavigate a system.

Data theft is likewise not uncommon. Some CTOs of insurance companies themselves admit that the technology encryption and security is in need of a lot of improvement. Especially now that data is also pulled from bodies like UIDAI, there is a real threat of sensitive information being leaked.

Internet banking-related information has also been misused to direct funds to private accounts which could in turn be used to perpetrate frauds or buy technological equipment for future crimes.

The insurance regulator as well as the insurance council has been sensitising policyholders at regular intervals about the perils of fraudulent calls and malicious links and websites. At a time when insurance penetration is below 5 percent of the country’s gross domestic product, another trust deficit episode (after the Ulip saga) is the last thing that the industry wants.