Financial Crime World

Czech Republic’s Fight Against Fraud: New Emerging Factors to Consider

Pressure to Adapt to Changing Customer Demands

Insurance companies in the Czech Republic have been facing pressure to adapt to changing customer demands in recent years. A survey conducted by Deloitte found that 45% of CEOs and CFOs of insurance companies in the EMEA region believe that clients’ evolving expectations will be the biggest challenge for growth. This trend is evident in the increasing importance placed on digital services, with customers expecting quick, seamless, and high-quality experiences.

Risk of Fraud in Digitization

However, this shift towards digitization has raised concerns about the risk of fraud. The American Coalition Against Insurance Fraud warns that the lack of human involvement in the process could make it easier for fraudsters to exploit new opportunities. Moreover, technological advancements in the automotive industry have increased auto insurance premiums, leading to a greater focus on fair pricing and effective fraud detection.

Growing Potential for Cooperation

Another key factor is the growing potential for cooperation among insurance companies in the Czech Republic. While shared databases are already being used in some Central and Eastern European markets, there is still much room for improvement. For example, Latvia has implemented a central database containing image documentation of damage, as well as camera system data from across the country.

However, legal frameworks and willingness to cooperate are also crucial. Insufficient attention to legal aspects can hinder the development of effective solutions, with 51% of respondents citing data regulation and cybersecurity as major challenges in adopting new technologies.

Success Depends on Cooperation and Advanced Technologies

The success of fraud detection efforts ultimately depends on cooperation among insurance companies, as well as the adoption of advanced technologies such as:

  • Data analytics
  • Artificial intelligence
  • Open-source data sources (e.g. satellite imagery or camera systems)

Platforming: A Key Concept in Fraud Detection

As the Czech Republic’s commercial insurance market continues to evolve, it is likely that platforming will become a key concept. This approach has already been successful in other fields, and its application in the insurance industry could revolutionize fraud detection.

Experts’ Optimism Despite Concerns

Despite concerns about the potential for fraudulent activity during economic downturns, experts are optimistic about the future of fraud detection in the Czech Republic. With increasing cooperation among insurance companies and the adoption of advanced technologies, it is likely that the industry will be able to effectively combat fraud and provide fair services to its customers.