Organised crime

In addition, states, financial institutions, national and international corporations also resort to methods of organised crime to achieve their goals. In these cases, part of the influence stems from the formal position and legal status. Organised crime is particularly encouraged in countries with a high level of patronage politics and political corruption and as such is closely linked to the state apparatus. Back in 2015, the European police organisation "Europol" published a study entitled "Exploring tomorrow's organised crime". In it, the police experts describe a shifting organised crime landscape, that is increasingly dominated by loose, undefined and flexible networks of individual criminal entrepreneurs, in which criminals work on a freelance basis and are no longer part of a larger network or group. They join together as "service providers" to support project-based criminal endeavours.

Important sub-sectors of organised crime are:

It lays within the nature of organised crime that it is the strategic undertaking of illegal conduct. Thus, besides the legal acts which do address organised crime directly, there exist many legal acts which already criminalise the conduct itself. The question of the pursuit of organised crime is not always a legal question but also the question of effective law enforcement. There are many international and national initiatives and laws in force to reduce and fight organised crime. Nevertheless, the efficiency of international rules largely depends on the individual countries and their power and willingness to enforce them.

The (re)insurance industry can be affected on the operational side, as it can be attacked by organised criminals due to its financial resources. In most cases, this happens through fraudulent acts such as the "fake president/CEO fraud", besides rather rare cases of burglary. Employees are also a target for kidnapping and ransom payments in developing countries. More important is the impact of organised crime on the business side, which occurs as an intrinsic risk in various lines of business, but also as a deliberately covered risk such as robbery, burglary and theft in property and motor insurance or special policies such as kidnap, ransom and extortion insurance. Other situations have arisen for example for D&O claims resulting from intentional acts (e.g. corporate insolvency when fraud was involved). Here the intent needs to be proven – respectively it needs to be proven that the management actually had knowledge about the manipulation, and even then, the policy might have to cover defence costs that can exhaust the policy limit.

For (re)insurers it is difficult to clearly attribute claims to organised crime. Thus, there is no distinction between "regular" and "organised" crime. Besides the difficulty of defining the term precisely for policy wordings, the next difficulty would be the question of who has the burden of proof that a crime is "organised". Insurers and associations try to reduce the risk and deliver additional service to the original insured by awareness campaigns in respect of organised crime risk and its reduction or avoidance by safety measures and security consulting. With the emergence of AI, insurers now have a new arsenal of means at their disposal to combat fraud. Applications can be found in personal insurance lines, which operate in mass markets and therefore have large datasets readily available to feed the machines. However, commercial insurances are developing new use cases as well.