Insurance Companies

While many in the insurance industry believe that banks and other financial organisations are the main targets of money launderers, the reality is considerably different. Insurance companies do not seem to be an obvious target for money launderers at first glance, because they are companies that sell policies rather than handling a steady stream of financial transactions. However, in real life, enormous, and frequently intricate amounts of money move in and out of insurance contracts, which require a large financial commitment. It should, thus, come as no surprise that financial fraudsters are increasingly focusing on this industry. In fact, in 2021, fraud or financial crime reportedly affected two thirds of insurance companies¹.

Suspicious activities include customers who want to pay premiums in cash or crypto-currencies, requests for transferring the benefit of a product to an unrelated third party or customers who overpaid the premium and want the money to be transferred to another bank account. When such activities occur, it is important to conduct the investigation by reporting the case to a dedicated Compliance Officer who ensures a proper analysis and avoids tipping off to the person in question. In order to report suspicious transactions, insurance companies must obtain pertinent customer information from agents, brokers, and any other sources².

Typically, a written AML program/Bank Secrecy Act (BSA) that takes into account the covered insurance products must be developed by insurance companies. The following elements must be present in the program at a minimum: