Fraudsters are increasingly exploiting Aadhaar-linked identity systems to file bogus insurance claims, prompting a large-scale probe by the Uttar Pradesh Police and a renewed industry push to tighten oversight across health, life, and motor insurance sectors.According to officials, criminals have now moved beyond PIN code manipulation — a fraud technique previously used to bypass claim verification filters — and are forging Aadhaar documents to obtain insurance policies or process fictitious claims, ET reported. As of late July, UP Police have sent notices to multiple insurers, seeking details of claims executives and internal fraud-control teams involved in suspicious transactions.“Aadhaar is emerging as the latest weak link in the fraud chain,” said Anukriti Sharma, Additional Superintendent of Police, Sambhal. “Fraudsters have started creating fake identities using forged or manipulated Aadhaar cards to obtain policies and to initiate fictitious claims.”According to industry estimates, fraud accounts for 10–15% of total insurance claims in India. Many of these involve organised rackets that stretch from rural villages to hospital corridors, where vulnerable individuals are persuaded to share Aadhaar details in exchange for monetary incentives. The details are then used to purchase high-value policies, often with the help of small finance banks that offer minimal scrutiny.“We have had 2–3 cases tied to the UP fraud,” said Krishnan Ramachandran, MD and CEO of Niva Bupa Health Insurance. “Our fraud investigation team is actively involved. These cases often involve fake documents and coordinated efforts.”Insurers are now increasingly flagging suspicious data and reporting it to the Insurance Information Bureau (IIB), the sector’s central fraud-monitoring agency. The IIB has been stepping up its use of analytics modules to detect patterns across claims and verify anomalies. One such module, which holds over 144 million records, helped identify 3 lakh potentially fraudulent life insurance cases involving a sum assured of Rs 1.73 lakh crore over the past five years.In several cases under investigation, police found that fraudsters altered Aadhaar-linked phone numbers and email addresses to prevent insurers from verifying claims with actual policyholders. These discrepancies often remain undetected until funds are withdrawn or a claim is processed.The probe also revealed that in many instances, claims were filed in the names of people who were either deceased or terminally ill, with syndicates using altered addresses to bypass blacklisted PIN codes. Policies of Rs 20 lakh or more were often involved.
