Fraud cost companies an average of $8.2 million in the past three years with losses increasing by 22 percent driven by the credit crunch and tough economic climate, according to the latest study by Kroll.

Kroll, which is a risk consultancy and has worked on several cases of fraud related to insurance in Bermuda over the past 18 years, revealed in its global fraud report the figure had gone up from $7.6 million last year, with information theft which rose to 27 percent from 22 percent and regulatory and compliance breaches up from 19 percent to 25 percent among the fastest growing types of fraud.

The results, which were obtained by a survey commissioned from The Economist Intelligence Unit of 890 senior executives worldwide, also showed that the construction and natural resources industries suffered the most incidents of fraud, due in part to the continuing increase in oil prices and a sector shift to higher-risk areas.

Health care, pharmaceuticals and biotechnology saw an rise in problems with corruption and theft of stocks or assets, while travel, leisure and transportation reported increases in regulatory and compliance breaches and information theft or loss.

More than four out of five companies surveyed (85 percent) have suffered from corporate fraud in the past three years, up from 80 percent in last year's survey. For larger companies the proportion suffering from fraud rose to 90 percent.

Blake Coppotelli, senior managing director in Kroll's business intelligence and investigations division, said: "The findings show that fraud is not only widespread, but also growing and we expect to see this increase further as conditions become tougher for business and the full impact of the credit crunch unfolds.

"When you look into the causes of fraud, companies that cited high staff turnover or weak internal controls suffered much higher levels of fraud — in almost every case increasing their exposure by one-and-a-half times.

"Companies need to look carefully at how they can address these issues to reduce their risk to fraud and improve their business operations."

Only two of the 10 categories of fraud tracked in the survey — money laundering and procurement fraud — declined annually, albeit by one percent each.

Other key findings included the fact that more developed economies (North America and Western Europe) saw less widespread fraud activity, while economically less developed regions (Middle East and Africa) experienced higher levels of fraud

In eight out of 10 fraud categories, companies in the Middle East and Africa had the highest or second highest incidence of activity, but in intellectual property theft, less developed regions saw the fewest incidents and North America the most.