For years, fraud in motor insurance has been one of those problems everyone in the industry knew about but few could quantify. That's changing. And the timing matters.

A new evidence base is forming, regulatory appetite for reform is real, and the technology to act on what the industry has long suspected is finally fit for the local market. The next few years are going to look very different from the last twenty.

What we now know

A recent study published in the Nigerian Journal of Risk and Insurance did something that's been overdue: it asked 120 underwriters, claims managers, brokers, and regulators what they actually see on the ground. For an industry that has long relied on anecdote, this is a meaningful step toward shared evidence.

Three findings stand out:

• Industry consensus is unusually strong. Experts broadly agree fraud is a significant operational issue (mean score 4.21 out of 5).
• Soft fraud is the bigger pattern. Opportunistic exaggeration of legitimate claims is seen as more common than organised schemes (4.05 vs. 3.12). A separate Lagos-based survey of claims professionals found the same pattern in practice: nearly a third of insurers reported detecting soft fraud more than 40 times a year, versus just 6% for hard fraud. Two studies, two methods, same conclusion.
• Solvency matters here. Fraud is viewed as a financial stability question, not just an operational one (4.18 out of 5). Senior professionals and regulators rate it the highest.

Read together, these findings do two helpful things. They confirm what the industry has long believed, and they put a number on it, moving the conversation from "we think this is bad" to "here's what 120 experts independently agree on."

Where the real opportunity is

Most public conversation about insurance fraud focuses on the dramatic stuff: staged accidents, fabricated injuries, organised rings. Those cases are real, but the data points elsewhere.

The bulk of motor insurance fraud, in Nigeria and globally, is soft fraud: claim padding, inflated quotes, duplicate submissions, small exaggerations of real incidents. Individually minor. Collectively material.

And this is actually the more solvable problem. Hard fraud needs investigations and prosecutions, which depend on long institutional reforms. Soft fraud is a pattern recognition problem, and pattern recognition is exactly what modern claims technology is good at. Every claim is an opportunity to apply consistent checks; every checked claim makes the next one easier to assess.

From perception to action

The study describes something it calls a perception–action gap: the industry has long recognised fraud as a problem but has lacked the tools and data infrastructure to act on it at scale. That gap is now closing.

There's a number worth putting on this. The same Lagos-based survey cited earlier found that more than half of insurers still rely on traditional rule-based or manual approaches to fraud detection, and roughly two-thirds have no specialised fraud detection software in place at all. Only a small minority have moved to AI-powered tools. The opportunity isn't to invent something new, it's to close the gap between what the industry knows it needs and what it has actually deployed.

Two shifts are driving the change. First, claims automation has matured to the point where every submission can be screened consistently, something manual processes simply can't do at volume. Second, the tooling has caught up to the specifics of African insurance markets, so insurers can act on what they've long observed rather than wait for global solutions to fit local realities.

The conditions for closing the perception–action gap genuinely exist. The diagnosis is shared. The technology is ready. What's left is execution.

Curacel's role

Curacel's claims automation platform is built for this moment. Three things shape how it works:

Every claim is screened automatically. Each submission is checked against patterns associated with fraudulent claims (inflated quotes, duplicate submissions, mismatched documentation) and flagged for review in seconds rather than weeks. This is the kind of consistent, at-scale checking the industry has needed for a long time.

Soft fraud is treated as a first-class problem. Because opportunistic exaggeration is where most of the loss actually sits, the platform is designed to catch the small, frequent patterns rather than only flagging dramatic outliers.

Detection improves with use. The more claims flowing through the system, the sharper the pattern recognition becomes. In a market where a centralised fraud registry doesn't yet exist, this kind of operational intelligence is one of the most practical paths forward, and one that complements, rather than waits on, longer-term regulatory work.

None of this replaces the broader institutional work led by NAICOM, the NIA, and the industry as a whole. It sits alongside it, and gives insurers something they can deploy today while those longer-horizon reforms continue.

The bigger picture

Insurance works when people trust it. Trust holds when honest policyholders aren't quietly subsidising fraudulent ones. The Nigerian study makes clear that the industry already understands this. What's new is that the means to act on it, at the speed and scale the market needs, are finally here.

That's a good place for the industry to be. And it's where Curacel is building.

Talk to us

If you're an insurer thinking about how to bring consistent fraud detection into your claims operation, we'd like to hear what you're working on. Curacel works with carriers across Africa to automate claims, catch fraud earlier, and tighten loss ratios without slowing down legitimate payouts.

Book a walkthrough of the platform at curacel.co/contact-us, or reach our team directly at sales@curacel.ai.

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