Insurance, energy and trade are among the sectors that are most exposed to the risk of fraud

23 October 2020

The number of industries that are exposed to the risk of loss due to fraud committed by individuals or specialized crime groups was limited, until recently, and fraud was committed mainly offline. The new economic context, however, may accelerate the transfer of crime to the online environment and also broaden the scope of companies at risk of fraud.

In a top of the Romanian companies most exposed to fraud, the insurance, energy, trade and banking companies are currently ranked first, with fraud being committed mainly offline.

Abroad, the main sectors targeted by criminal groups are banks, trade, insurance and energy. Great Britain, Germany, France, Italy and Spain are among the most advanced countries in terms of use of the specialized private investigation services.

The insurance industry is the area most exposed to cross-border crime Fraud is committed by networks that operate on a global scale, are well organized and have an impressive range of resources and know-how. They permanently refine and update their methods and customize their cases so that a solution applied to a case is no longer useful in other cases. The methods that generate the highest losses for insurers that do not take protective measures in time include fraud with high and very high market value cars, and fraud with alleged heirs of victims of traffic accidents.

The profession of private investigator was regulated in Romania in 2003, with the adoption of Law no. 329. Services for companies started to really develop only after 2010, when foreign investors – multinationals or investment funds that made acquisitions in strategic areas, started to request corporate investigations, economic-financial investigations, due diligence or background check investigations.

Basically, the Romanian market was formed due to multinational companies that needed to protect their investments, to identify, to limit and even eliminate the risks of fraud to which they were exposed. Our country is still in a starting phase, unlike the Western European market, where decades of activity have resulted in a regulated industry, with strong professional organizations and associations.

Considered a young market, with an aggregate turnover close to the threshold of EUR 10 million in 2019, the market of private investigation services in Romania is dominated in terms of value by services for companies, although the agencies that provide services to individuals represent more than 80%.

90% of last year’s turnover of the industry was achieved by the top 10 private investigation agencies out of the over 650 licensed agencies in the field, according to official statistics.

Although strongly affected by the pandemic, the Romanian market of private investigation services in the corporate environment has the ability to adapt quickly to the changes imposed by the new business models and, implicitly, to deal with the transfer of crime from offline to online.