What is a reason criminals turn to the insurance industry for money laundering?

The reason criminals may turn to the insurance industry for money laundering is that the insurance products and services can often be more complex and less scrutinized compared to banking transactions. While insurers are indeed incorporating advanced Anti-Money Laundering (AML) technology, this progress can inadvertently create opportunities for criminals who exploit any remaining gaps in oversight.

Insurance products can provide high levels of anonymity and flexibility, allowing for the movement of illicit funds under the guise of legitimate policies. This context makes it crucial for the insurance sector to enhance its AML compliance measures, despite the technological advancements being implemented. In contrast, the other factors listed provide reasons that do not directly point to why the insurance industry becomes an attractive avenue for laundering money.

As criminals adapt to enhanced controls in traditional banking, they may seek out industries like insurance that are still developing their AML frameworks or where enforcement may lag behind, creating vulnerabilities.