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Health insurance fraud is a growing global problem, costing the industry billions and increasing premiums for consumers. According to the National Healthcare Anti-Fraud Association, insurance fraud costs up to $230 billion annually in the US alone. In developing markets like Kenya and South Africa, the situation is equally alarming. In 2012, Kenya lost Sh253.6 million due to medical insurance fraud with only a fraction recovered.

An article by Radar Africa reported that the country loses up to Sh33 billion to insurance fraud in the medical segment. South Africa faces a similar issue with the highest investigated fraud value tied to pharmacies. Even developed markets like the United States report 10% of annual healthcare spending lost to fraud. Fraudulent activities in health insurance can involve various sectors, including surgeries, invasive testing, and certain drug therapies, posing significant physical risks to patients. In response, professionals within the industry are urged to develop early detection and prevention strategies.