It began, as most tragedies do, with trust. In a local insurance company, the head of IT had been there for eight years. Loyal, quiet, and efficient. The kind of man who never raised his voice or suspicion. Yet beneath the hum of the servers he managed, a quiet betrayal brewed.
Insurance firms love to talk about coverage, floods, fires, and car crashes, but the greatest uninsured risk sits inside their own offices: their IT teams.
When fraud happens, people look outward, to hackers, ransomware, or “Russian IPs.” The truth? Eight out of ten breaches in the insurance industry start from within. A clever IT officer with domain access can bury evidence so deep even the best auditors will call it “a system glitch.”
Ask yourself right now, who in your organization has access to the system administrator password? If you need to think about it, you are already in danger.
“The next breach won’t come from a hacker in Moscow. It will come from the man who fixed your printer last week.”
The hidden syndicate inside
The insurance IT department is often small, five people, maybe fewer. They eat lunch together, go for coffee together, and sometimes, retire together. That’s how a syndicate forms, not in dark alleys, but in fluorescent-lit server rooms.
In one Ugandan insurer, “Suspect 1” and “Suspect 2” perfected the art of invisible fraud. They started by deleting a dormant policy record to test system sensitivity. When no one noticed, they created a fake claim worth UGX 2 million. Just a test. Then another. And another.
The pattern was too small to catch. But that’s how syndicates grow, not by greed at once, but by confidence over time. Draw a map of your IT team and claims officers. Who could collude without triggering a system alert?
The ghost claim factory
This is the dark heart of insider fraud: data manipulation. Using authentic customer data from onboarding systems, the syndicate built “ghost policies”, fake but perfectly formatted. Real agents’ names. Real policy numbers. Real dates.
Payments were made to mobile money accounts registered under false IDs. No one noticed because the amounts were small, UGX 300,000 here, UGX 450,000 there. Spread over months, they totaled millions.
The fraud didn’t need hacking skills. It needed only access, routine, and a deadened sense of accountability.
Activity
Pick three random claims from your system today. Verify the identity of each beneficiary beyond the policy file. Do it physically, not digitally. You will be shocked at how many ghosts you’re insuring. “In Uganda’s insurance sector, the most profitable customer may not exist at all.”
The “patch update” disguise
Every fraud needs a disguise. For insiders, that disguise is maintenance. “We’re applying a patch,” they say. “The system will be down for one hour.” That hour is eternity in digital terms.
It’s during these “updates” that configurations are changed, logs are deleted, and backups are quietly replaced. The IT world calls it maintenance. Investigators call it the crime window.
When Summit Consulting Ltd investigated one insurer, we found that every fraudulent claim coincided with a “patch update” entry in the maintenance log. That’s no coincidence but camouflage.
Review your maintenance schedules. Who authorizes them? Who supervises them? Who reviews logs after? If it’s the same person, that’s the first control failure.
Collusion between IT and claims officers
Fraud rarely happens in isolation. IT provides access. Claims officers provide the cover story. Together, they build the perfect loop: fake claim, approved payment, deleted evidence.
One insurer discovered that its “system crash” reports always followed large claim approvals. When digital forensics reconstructed deleted records, two logins emerged, one from IT, one from Claims, five minutes apart. Coincidence? Not a chance.
List all functions in your claim approval chain. Is there a single point where one person can approve, pay, and erase a transaction? If yes, you have already written your own fraud policy.
“Fraud is not born in dark rooms. It’s born in relationships of trust, between people who know each other too well.”
The mobile money loophole
Convenience kills control. Mobile money has become the new frontier for insurance payouts, fast, low-cost, and paperless. But it’s also a paradise for ghost claimants.
Fraudsters exploit untraceable SIM cards, splitting payouts across multiple numbers registered under relatives or acquaintances.
In one case, investigators found 14 wallets linked to the same device IMEI (International Mobile Equipment Identity). The system checked phone numbers, not devices.
Audit your last 100 mobile payouts. Check if any numbers share the same device IMEI or transaction fingerprint. If they do, call the telecom. You’re funding a ghost.
The failed segregation of duties
Ugandan insurers love to talk about “internal controls.” Yet most IT departments have one person who serves as system admin, database admin, and backup admin. That’s like letting one man hold both the bank keys and the CCTV remote.
When Summit Consulting reviewed an insurer’s access matrix, we found one user with privileges to alter claim approvals and purge logs, a digital superuser. The man was on leave. But his credentials were active.
Print your IT access list. Count how many people can both approve and delete system data. The number should never exceed one, and even that one should have a watcher.
“In cybersecurity, segregation of duties is not a principle but survival.”
How red flags were missed
Auditors came every quarter, ticked boxes, confirmed that backups existed, verified that reconciliations matched, and never asked how.
The losses, about UGX 3.4 billion, were hidden in plain sight across 312 micro-claims. None exceeded the internal audit materiality threshold. That’s how insiders think: below the radar, above the suspicion.
Lower your internal audit threshold for random testing. Sometimes the smallest losses reveal the biggest scandals.
How the investigators cracked it
When the insurer’s new CEO noticed that “fraud recoveries” kept reappearing every quarter, he called Summit Consulting Ltd. The digital forensics trail led us to late-night VPN logins, falsified timestamps, and system access from non-office IP addresses.
When confronted, Suspect 1 broke down. “I only did it to test if the system could detect it,” he said. A common justification for insider fraud. Curiosity first, corruption later.
Our forensic mirror revealed that deleted logs had been copied to an off-site backup server, the suspect didn’t know it existed, and that’s how we cracked it.
Introduce mirrored backups that IT cannot access. They are your silent witnesses when betrayal begins.
The real loss, and what must change
Total loss: UGX 3.4 billion.
Total lesson: priceless.
Technology didn’t fail the insurer, but trust did. The solution isn’t to fire IT staff, it’s to create controls that even trusted staff cannot override.
Rotation, dual authorization, behavioral analytics, and cultural reform are the new pillars of cyber resilience. Insurers can’t just underwrite digital risk; they must architect digital integrity.
Before the week ends, review every IT access privilege in your company. Implement at least one control you can’t override yourself. Leadership is accountability, not convenience.
“Every insurer protects others from risk. But who protects the insurer from itself?”
Uganda’s insurance sector is growing. But with growth comes greed, and with technology comes temptation. The modern cybercriminal no longer hides behind a mask; he hides behind a job title.
As we mark Cybersecurity Awareness Month, remember this truth: Your biggest vulnerability is not malware, it’s misplaced trust.
Register your team for a free cybersecurity session worth UGX 5 million at https://event.forensicsinstitute.org/cyber-security-awareness-month-2025/ or secure your seat at Uganda’s cybersecurity Conference: https://event.forensicsinstitute.org/. Because prevention is cheaper than confession.
