Indian insurance companies have borne a loss of over Rs 30,000 crore in 2011 due to different kinds of frauds, a study has claimed.

It cited collusion between the employees of insurers and private persons, document falsification and manipulation in citing cause of death to claim insurance benefits, as some of the reasons behind these frauds.

"The losses caused to the insurance sector are Rs 30,401 crore which is roughly 9 per cent of the total estimated size of insurance industry in the year 2011," the report said.

The total premium income of the insurance industry comprising life, non-life and health, is around Rs 3.5 lakh crore, as per the Insurance Regulatory and Development Authority (IRDA) data.

The study was conducted by a Pune-based company Indiaforensic, which conducts fraud examination, security, risk management and forensic accounting research. It has also helped the country's investigating agencies like CBI in several high profile cases such as the multi-crore Satyam scam.

About 86 per cent of the frauds occurred in the Life Insurance segment while the remaining 14 per cent took place in the General Insurance sector (which includes risk of loss to assets like car, house, accidents, etc), it said.

According to the study, in last five years the frauds in Life Insurance sector had more than doubled (103 per cent) whereas the frauds in the General Insurance sector rose by 70 per cent.

A total of Rs 15,288 crore (Rs 13,148 cr in life insurance and Rs 2,140 cr in general) was the loss borne by the companies in 2007. In 2011, the loss was pegged at Rs 30,441 crore.

"The insurance sector is susceptible to various frauds in the country. There is an urgent need to have strict measures including setting up of a dedicated unit to detect and check frauds in the companies," said anti-fraud and money laundering expert Mayur Joshi, who is founder member of Indiaforensic.

The study said that insurers were defrauding the companies by not disclosing existing diseases by manipulating the empaneled doctor while applying for the policy.

"All insurance policies have an eligible age at which the policy can be taken. To accommodate oneself in to the product or enjoy a lower premium, age proofs are modified to show a reduced age.

"Some cases require medical tests to issue the policy. However, to substantiate non-disclosed or misrepresented medical conditions, a different person may be sent at the time of the tests. While this may work to get the policy, it would create discrepancy at the time of claims," it said.

There have been cases where the date of death was on the death certificate has been fraudulently changed to a date before the actual death when the policy was in force, so as to register a claim, the study said.

"Medical Bills forgery is the most common scheme of frauds which affect the Health Insurance sector the most. In as many as 31 per cent of the total falsified documentation schemes medical bills were the common target of the frauds by the external parties.

"The second most common scheme of the frauds in the General Insurance space is the non-disclosure of the facts. Travel abroad for the surgery without disclosing it or getting the damaged vehicle insured without disclosing the accident are some of the common schemes," it said giving examples of frauds in general insurance sector.

According to Ashish, a certified fraud examiner and investigator 'there is a need to have fraud control units in insurance sector to check losses. The study highlights a worrying trend'.