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Abstract
Responses to insurance fraud in eight Western industrialized nations are described, and located by reference to the apparent extent of fraud and the degree of organized control. It is clear that the problem has been growing in recent years and that there are similarities in the responses of different nations, but there are also considerable variations both in the willingness to respond collectively and publicly and in the tactics adopted. © 1990 The Institute for the Study and Treatment of Delinquency.
... There is plenty of literature studying fraud risk from regulatory perspective (Clarke, 1990), corporate perspective (Bebbington et al., 2008;Law, 2011) and auditing perspective (Bierstaker et al., 2006;Hassink et al., 2010) however, there is rarely any study from management and governance perspectives. ...
... The repercussions of unregulated market would result in slow development of fraudulent culture (Salterio, 2008) and when exaggerated may result in corporate lobbying for frauds (Yu and Yu, 2012). Rarely role of independent institutions (Bierstaker et al., 2006) and fraud bureau (Clarke, 1990) have been explored. Mainly the literature is concentrated on developed countries such as Holland, Australia, New Zealand and USA (Hassink et al., 2010;Kummer et al., 2015;Law, 2011). ...
... Insurance frauds at rampant stage cannot be developed in a year rather it is slowly developed during multi-years and pass through many stages. Clarke (1990) pointed out four stages of insurance frauds: soft fraud, hard fraud, fraud concentration, fraud rampant. At initial stage fraud is not seen important and happens occasionally due to some force or desperate need of the claimant while at second stage fraud becomes part of minority insured with persistent opportunist exploitation of genuine claims (Clarke, 1990). ...
... There is plenty of literature studying fraud risk from regulatory perspective (Clarke, 1990), corporate perspective (Bebbington et al., 2008;Law, 2011) and auditing perspective (Bierstaker et al., 2006;Hassink et al., 2010) however, there is rarely any study from management and governance perspectives. ...
... The repercussions of unregulated market would result in slow development of fraudulent culture (Salterio, 2008) and when exaggerated may result in corporate lobbying for frauds (Yu and Yu, 2012). Rarely role of independent institutions (Bierstaker et al., 2006) and fraud bureau (Clarke, 1990) have been explored. Mainly the literature is concentrated on developed countries such as Holland, Australia, New Zealand and USA (Hassink et al., 2010;Kummer et al., 2015;Law, 2011). ...
... Insurance frauds at rampant stage cannot be developed in a year rather it is slowly developed during multi-years and pass through many stages. Clarke (1990) pointed out four stages of insurance frauds: soft fraud, hard fraud, fraud concentration, fraud rampant. At initial stage fraud is not seen important and happens occasionally due to some force or desperate need of the claimant while at second stage fraud becomes part of minority insured with persistent opportunist exploitation of genuine claims (Clarke, 1990). ...
nsurance fraud is a complex term understudied in management and governance literature. Insurance fraud consists of policyholder fraud, internal fraud and intermediary fraud. It can be measured at four stages ranging from hard frauds to rampant fraudulent culture. An attention is needed to understand the reasons of rampant fraudulent culture in India. This is the first study (as per author's knowledge) on fraudulent culture in Indian insurance industry that provides broad overview of what insurance fraud is, types of insurance fraud, role of different parties involved, reasons of rampant insurance frauds, strategies adopted and the way forward. The results revealed that direct responsibility of combating insurance fraud is not provided to any institutions, therefore fraud redressal takes a backseat in priorities. Corporates have adopted proactive, reactive and vigilant approaches and used fraud investigation cells, cause and effect analysis and trend analysis to understand the fraudulent culture.
... Tids serien måste tolkas med försiktighet, och ökningen mellan 2011 och 2013 kan möjligen bero på att Svensk Försäkring gett frågan högre prioritet, exempelvis genom sina riktlinjer. Det är viktigt att hålla i minnet att denna kriminalstatistik ska ses som ett resultat av försäkringsbolagens och myndigheternas arbete med att upp täcka och utreda försäkringsbedrägerier (se Clarke 1990, Baker 1994, samt som en indikator på vilka handlingar som olika ak törer för tillfället vill klassificera som brottsliga (Christie 2005). Med andra ord kan en förändring i försäkringsbolagens anmäl ningsstrategi påverka anmälningsstatistiken markant (Persson och Bongenhielm 1994). ...
... McNally 2005) • försäkringsbedrägerier (Clarke 1989, Clarke 1990, Gill 2001, Smith m.fl. 2010 Med andra ord kännetecknas bedrägeribrottet av vilseledandet och av att det leder till skada samt vinning. ...
... Moreover, the strength of this relationship can be interpreted in other ways. Researchers do not agree on the extent of claim padding (Clarke 1990; Derrig 2002). While Ross (1970) stressed that " (t)he adjuster typically believes that few people cut false claims from whole cloth, but that nearly everyone exaggerate his loss " (p. ...
... Insurance fraud estimations not only vary from one study to another, but there also is no agreement on the methodologies to use to compute such estimates (Clarke 1990; Derrig 2002). Notwithstanding the different methodologies, some estimate the general costs associated with insurance fraud (Report of the National Committee of Experts on Insurance Fraud 1994), while others measure the extent of some precise forms of insurance frauds (see Tremblay et al. 1992). ...
Le présent ouvrage se présente sous la forme d’un recueil de textes originaux qui s’inscrivent en continuité avec les principaux débats sur la scène de la criminalité économique. Le lecteur y trouvera de riches informations, entre autres, sur les questions des lois et de leur application dans divers contextes, des pratiques de prévention de la criminalité économique, du crime organisé et du financement du terrorisme.
Le recueil est divisé en fonction de cinq principaux thèmes :
1. Le blanchiment d’argent et la confiscation des profits du crime.
2. La corruption.
3. Les infractions contre le patrimoine et la délinquance en entreprise.
4. L’éthique, la prévention et la perception de la criminalité économique.
5. La criminalité organisée et le trafic de stupéfiants.
Au total, ce sont 21 textes qui sauront à la fois instruire le néophyte et stimuler la réflexion chez le chercheur aguerri. Sans oublier que les décideurs en entreprise et responsables de la sécurité y trouveront de riches enseignements sur les mesures en prévention du crime économique et les modes opératoires des fraudeurs.
... Moreover, the strength of this relationship can be interpreted in other ways. Researchers do not agree on the extent of claim padding (Clarke 1990;Derrig 2002). While Ross (1970) stressed that "(t)he adjuster typically believes that few people cut false claims from whole cloth, but that nearly everyone exaggerate his loss" (p. ...
... 45), Tremblay et al. (1992) estimated that about 0.02 and 1.25% of the total value paid in indemnities by Quebec insurers was related to claim padding. 10 In fact, insurers may well overestimate the gravity of the 10 Insurance fraud estimations not only vary from one study to another, but there also is no agreement on the methodologies to use to compute such estimates (Clarke 1990;Derrig 2002). Notwithstanding the different methodologies, some estimate the general costs associated with insurance fraud (Report of the National Committee of Experts on Insurance Fraud 1994), while others measure the extent of some precise forms of insurance frauds (see Tremblay et al. 1992). ...
While it is generally argued that threats of legal sanctions are more effective with offenders involved in economic crimes
than with delinquents committing more conventional crimes, such an affirmation rests on weak empirical evidence. Also, most
studies supporting this proposition were conducted with non-experimental designs, thus, undermining the interval validity
of the results. On the other hand, studies base their predictions on individual factors and do not incorporate contextual
factors. To overcome those limitations, a randomized field experiment was implemented in four insurance companies to incorporate
contextual factors into the dynamics of deterrence. This study assessed the effect of a written threat (a deterrent letter
reminding insured persons of the punishment for insurance fraud) on claim padding behaviours of insured persons filing claims
for residential theft. A deterrent-letter project was implemented in four insurance companies, with claims randomly assigned
to the experimental or the control group. Cases belonging to the control group were managed as usual, while individuals in
the experimental group received the written threat. The experimental design made sure that the deterrent stimulus was exactly
delivered to the insured persons when they had the opportunity to exaggerate the value of their claims. Findings demonstrate
that claimants in the experimental group were less likely to pad their claims than were those in the control group. The letter
was effective, regardless of the means of delivery. In conclusion, the administration of a written threat at the moment of
criminal opportunity appears to be an effective strategy for preventing economic crimes.
... Refer to Table 2 for additional descriptions of the response and explanatory variables Impact of Enforcement on Healthcare Billing Fraud: Evidence from the USA 225 (e.g., Derrig 2002;Ghezzi 1983;Lesch and Baker 2013;Warren and Schweitzer 2016), our paper examines the impact of a governmental special investigation unit. Moreover, special investigation units are one small piece of a broad, multi-faceted, fraud fighting apparatus that includes combinations of governmental and private resources within an environment of shifting cultural attitudes toward insurance fraud (Clarke 1990;Viaene and Dedene 2004). Our paper highlights that anti-fraud resources at the governmental level are not evenly distributed across states. ...
Each state’s Medicaid Fraud Control Unit (MFCU) prosecutes billing fraud cases against individual healthcare providers who fraudulently bill Medicaid for services provided. Once an individual is convicted of billing fraud, the Office of Inspector General for the Department of Health and Human Services may exclude the individual from billing any federal government healthcare program, including Medicaid. Excluded individuals are added to a public list of exclusions, which restricts their ability to practice professionally. Prompted by criminology research into the impact of policing resources, we test whether these government enforcement initiatives against fraud serve as a deterrent to would-be fraudulent billers. We document that key enforcement proxies, the staffing level and budget of an MFCU, are positively associated with the yearly number of exclusions added at the state level. Our results are consistent with the exclusion list not being a deterrent but provide support for MFCUs’ fraud detection efforts. This paper provides industry-specific fraud insights for auditors and other individuals involved in public policy, specifically Medicaid, and introduces a novel dataset to the accounting fraud research literature.
... Larger firms accept that about 15-20% of the claims contain some form of fraud, while smaller companies are much more heterogeneous, so that they may reach 60%. These figures are similar to those reported by CAIF (2015) for the US market, 15% of fraud in the insurance industry, and by Clarke (1990) for German insurance market which he peaked at 11% in the automobile industry. The insurance fraud types and their causes which exist in the Ghanaian insurance industry are summarized as follows: ...
Purpose
This paper aims to measure the extent of effects of insurance fraud on the financial performance of insurance companies in Ghana. It also examines the causes and stringent measures that can be used to fight against insurance fraud.
Design/methodology/approach
Primary and secondary data obtained from 39 insurers in Ghana are used in this paper. A multiple regression model is used to determine the relationship between financial performance and insurance fraud variables.
Findings
The results from the model indicate that statistically insurance fraud has a significant negative effect on the annual return on assets (financial performance) of insurers in Ghana. Also, weak internal controls, poor remuneration of employees, falsified documents, deliberate acts of policyholders to profit from the insurance contract and inadequate training for independent brokers are found to be the major causes of insurance fraud in Ghana. To deter insurance fraud, effective internal fraud policy, rigorous assessment of insurance policies and claims, adequate training for independent brokers on insurance fraud and modern information technology tools are paramount in fighting this menace in Ghana.
Research limitations/implications
These findings are to have substantial impact on the techniques insurance companies will develop to fight insurance fraud and the policies that will be developed by governments and national insurance regulatory bodies to fight this menace.
Originality/value
The main value of this paper is the determination of the key variables that constitute insurance fraud and their impacts on the annual financial performance of insurance companies in Ghana.
... 'Cash-forcrash' fraud forms a significant part of this loss at £392 million per annum (Insurance Fraud Bureau, 2013). There has, however, been limited research on this type of fraud in the UK (Clarke, 1989(Clarke, , 1990Dobie, 2012;Doig, Jones, & Wait, 1999;Gill et al., 1994;Litton, 2000;Morley, Ball, & Ormerod, 2006;Palasinski, 2009;Smith, Button, Johnston, & Frimpong, 2010). There has been only one major study in the UK based upon interviews with insurance fraudsters (which covered a much wider brief of all insurance type frauds), which will be returned to later in this article (Gill & Randall, 2015). ...
There is much international research on the different types of fraud committed by individuals and/or organised crime. There is, however, limited research on insurance fraud and a particular species of such fraud which has become known as ‘cash-for-crash’ fraud in the United Kingdom. In addition, there are very few published studies of fraudsters which actually draw upon interviews with them. This article bridges both of these gaps providing a focus upon ‘cash-for-crash’ fraudsters which is based upon empirical research drawn from six interviews with such offenders and a database of over 400 offenders built upon successful prosecutions of such cases in the United Kingdom. This article offers a profile of such offenders and presents insights into why and how some people might become involved in ‘cash-for-crash’ type frauds.
... Researchers have also studied the responses of the insurance industry to fraud. They note that despite some similarities in how fraud is tackled, there are considerable differences in the adopted tactics (Clarke, 1990), in the definition of fraud (Doig, Jones, & Wait, 1999) and in fraud detection methods. The methods may include a voice stress analysis (Horvath, 1982), statistical analysis (Artis, Ayuso, & Guillen, 2002), anti-fraud software analysis (Morley, Ball, & Ormerod, 2006), "suspicion-building" IT toolset (Ormerod, Ball, & Morley, 2012) and claims auditing strategies (Schiller, 2006;Tennyson & Salsas-Forn, 2002). ...
The main purpose of this study was to explore the impact of downsizing and efficiency measures on two key elements of operational performance - fraud detection and fraud reporting. Qualitative data were obtained from ethnographic observations of two major multinational insurance companies, which were already examined before the Global Financial Crisis, and subjected to an inter- and intra-business comparative analysis of anti-fraud resources. The paper points out a big discrepancy in opinions on the downsizing effects between junior staff and their supervisors. Whereas the latter present them as enabling the business to deal with suspicious claims more quickly, the former offer a contrastingly different view in which the constantly growing pressure often leads to suspicious claims getting approved. By validating the practical implications of a purposefully adapted version of resource-based theory, the paper illustrates the inviability of subjecting anti-fraud resources to the same levels of downsizing and efficiency as other business resources. Although the literature on the general negative impact of downsizing on the broadly-defined operational performance is growing, this is the first major study to examine its impact on insurance anti-fraud processes and illustrate their changes following the Global Financial Crisis.
... Fraudulent insurance claims cause tremendous monetary losses for insurance companies, resulting in increased premiums for other policyholders. Fraudulent behavior includes falsification of details to qualify for cover, claims for losses that have never really occurred, as well as exaggerated claims or "build-ups" (Clarke 1990). One common form of fraud is exaggerating damages to reclaim one's deductible. ...
The completion of online forms is the catalyst for many business and governmental processes. However, providing fraudulent information in such forms is pervasive, resulting in costly consequences for organizations and society. Furthermore, detecting fraudulent responses in online forms is often very difficult, time consuming, and expensive. This research proposes that analyzing users’ mouse movements may reveal when a person is being fraudulent. Namely, based on neuroscience and deception theory, the paper explains how deception may influence hand movements captured via the computer mouse. In an insurance fraud context, a study is conducted to explore these proposed relationships. The results suggest that being deceptive may increase the normalized distance of movement, decrease the speed of movement, increase the response time, and result in more left clicks. Implications for human-computer interaction research and practice are discussed.
... Consequently, searching database systems can lead to problems, both with the failure to find expected records, and the generation of false positives through erroneous matches. Attempts at understanding insurance fraud have focused primarily on understanding the characteristics of frauds (Clarke, 1989Clarke, , 1990 Dodd, 1998; Doig et al., 1999), and relied heavily on potentially inadequate methodologies such as sampling of fraudulent claims, interviews and surveys. Litton (1990) argues that this research should be treated with scepticism because it is typically sparse and often anecdotal. ...
Insurance fraud is a serious and growing problem, and there is widespread recognition that traditional approaches to tackling fraud are inadequate. Studies of insurance fraud have typically focused upon identifying characteristics of fraudulent claims and claimants, and this focus is apparent in the current wave of forensic and data-mining technologies for fraud detection. An alternative approach is to understand and then optimize existing practices in the detection of fraud. We report an ethnographic study that explored the nature of motor insurance fraud-detection practices in two leading insurance companies. The results of the study suggest that an occupational focus on the practices of fraud detection can complement and enhance forensic and data-mining approaches to the detection of potentially fraudulent claims.
... The units came to be known generally as Special Investigation Units, or SIUs (Ghezzi, 1983), and are commonplace now in claims operations in the United States. Canadian and European insurers recognized the fraud problem as well and moved to adopt the SIU format for handling suspicious claims (Clarke, 1986(Clarke, , 1990Comité Européen des Assurances, 1996;Dionne and Belhadji, 1996;Dionne, Gibbens, and St.-Michel, 1993; Insurance Bureau of Canada, 1994). By the late 1990s, companies in the United States had developed extensive internal procedures to cope with fraud while individual state governments established fraud bureaus to investigate and prosecute perpetrators criminally (Insurance Research Council, 1997). ...
Several state-of-the-art binary classification techniques are experimentally evaluated in the context of expert automobile insurance claim fraud detection. The predictive power of logistic regression, C4.5 decision tree, k-nearest neighbor, Bayesian learning multilayer perceptron neural network, least-squares support vector machine, naive Bayes, and tree-augmented naive Bayes classification is contrasted. For most of these algorithm types, we report on several operationalizations using alternative hyperparameter or design choices. We compare these in terms of mean percentage correctly classified (FCC) and mean area under the receiver operating characteristic (AUROC) curve using a stratified, blocked, ten-fold cross-validation experiment. We also contrast algorithm type performance visually by means of the convex hull of the receiver operating characteristic (ROC) curves associated with the alternative operationalizations per algorithm type. The study is based on a data set of 1,399 personal injury protection claims from 1993 accidents collected by the Automobile Insurers Bureau of Massachusetts. To stay as close to real-life operating conditions as possible, we consider only predictors that are known relatively early in the life of a claim. Furthermore, based on the qualification of each available claim by both a verbal expert assessment of suspicion of fraud and a ten-point-scale expert suspicion score.
... For an up-to-date general discussion of moral hazard in the insurance in the late 1980s (Clarke, 1989). By the end of the 1980s, an emerging consensus on the problem of fraud, but with wide variation in the responses, was noted for eight industrial nations, including the United States and Canada (Clarke, 1990). Market studies of fraud have been conducted in the United States by the Insurance Research Council (1992 Council ( , 1997), by the Insurance Bureau of Canada (Fortin and Girard, 1992; Insurance Bureau of Canada, 1994), by the Insurance Councils of Australia (1994) and New Zealand (1996), and by Artís et al. (1999) for the Spanish Auto Insurance Market . ...
Insurance fraud is a major problem in the United States at the beginning of the 21st century. It has no doubt existed wherever insurance policies are written, taking different forms to suit the economic time and coverage available. From the advent of “railway spine” in the 19th century to “trip and falls” and “whiplash” in the 20th century, individuals and groups have always been willing and able to file bogus claims. The term fraud carries the connotation that the activity is illegal with prosecution and sanctions as the threatened outcomes. The reality of current discourse is a much more expanded notion of fraud that covers many unnecessary, unwanted, and opportunistic manipulations of the system that fall short of criminal behavior. Those may be better suited to civil adjudicators or legislative reformers. This survey describes the range of these moral hazards arising from asymmetric information, especially in claiming behavior, and the steps taken to model the process and enhance detection and deterrence of fraud in its widest sense. The fundamental problem for insurers coping with both fraud and systemic abuse is to devise a mechanism that efficiently sorts claims into categories that require the acquisition of additional information at a cost. The five articles published in this issue of the Journal of Risk and Insurance advance our knowledge on several fronts. Measurement, detection, and deterrence of fraud are advanced through statistical models, intelligent technologies are applied to informative databases to provide for efficient claim sorts, and strategic analysis is applied to property-liability and health insurance situations.
... Numerous researchers, some in academia and others in the industry, have, since the early 1980s, examined and proposed solutions to problems of moral hazard (and fraud in particular ) in the insurance market. Notable studies include, but are not limited to, examination of how the presence of insurance affects the possibilities of fraud (Dionne, 1984), perception of fraud by the insurer and by the insured in eight countries (Clark, 1990), behavioral factors and lottery conditions under the no-fault automobile insurance system (Derrig, Weisberg, and Chen, 1994), workers' compensation insurance fraud (Butler, Durbin, and Helvacian, 1996), the theoretically fraud-inducing economic environment (Boyer, 2000 ), claims auditing as a means to deter and detect fraud in automobile insurance (Tennyson and Salsas-Forn, 2002), use of general damage awards by insurers to reduce fraudulent claims (Loughran, 2005), and the relationship between coinsurance and fraud frequency in the healthcare industry (Sulzle and Wambach, 2005). Several studies also look into ethics in the insurance market (e.g., Tennyson, 1997 Tennyson, , 2002 Dean, 2002). ...
This article introduces a government-led insurance fraud detection program in Korea. The Insurance Fraud Recognition System (IFRS) uses policy and claims data from multi-lines of insurance (life, automobile, and fire), employs a three-stage statistical and link analysis to identify presumably fraudulent claims by claimant or by group, and generates system reports that the government regulator draws on to make decisions. The authors evaluate the system based on the fraud statistics and IFRS results for 2004, and offer recommendations for system improvement. This article examines existing studies about fraud, industry experiments using advanced technology, and government assistance to the insurance industry's fight against fraud in selected countries. It also provides a brief overview of the Korean insurance market, especially after the recent Asian economic crisis.
... A second gap in understanding exists with respect to the response of controls to new fraud species. Much prior work has also focused on individual fraud types, such as identity theft [29], intellectual property fraud [31] or insurance fraud [14]. However, given the modern firm's level of popularity and interconnection, it may not be feasible to focus on just one kind of fraud at the expense of all others that could befall the firm. ...
Complex fraud, involving heightened offender knowledge of organizational processes, can be especially damaging to the firm. Much research has focused on technical, quantitative detection methods. This paper uses multidimensional scaling of empirical fraud event data from a large telecommunications firm to illustrate how technical and socio-technical fraud controls are used to detect fraud at varying levels of time exposure and dollar loss. The evidence suggests that technical controls only detect one third of fraud cases with zero time exposure and loss. More complex fraud is detected with a range of technical and socio-technical controls from inside and outside the firm. Interviews with twelve fraud managers and investigators are used to confirm the findings.
... One of the largest companies (see Cobo, 1993) states that 22% of the claims contain some suspicious circumstance. These figures are similar to those reported by Hoyt (1990) for the US (15% of fraud in the insurance industry) and by Clarke (1990) for Germany (11% in the automobile industry). A similar overview is given by Picard (1996). ...
From a microeconomic point of view, the control of insurance fraud requires a detailed knowledge of the insureds’ behaviour. In this paper, we present discrete-choice models for fraud behaviour and we estimate the influence of the insured and claim characteristics on the probability of committing fraud. Data correspond to a Spanish sample. Correction for choice-based sampling is introduced in the estimation due to the oversampling of fraud claims. The structure of the Spanish automobile insurance market is also discussed. Our results differ according to the type of fraud behaviour that is under consideration.
La lutte contre la fraude en assurance demeure un défi majeur, particulièrement en Algérie, où malgré la croissance du marché, ce fléau persiste, affectant les compagnies, les assurés et l'économie. Les définitions de la fraude varient, mais toutes mettent en évidence son caractère intentionnel et ses conséquences néfastes. Les obstacles internes, comme les systèmes inefficaces et les lacunes dans la gestion des ressources humaines, compliquent les efforts de prévention et de détection. Des mesures telles que la détection précoce des fraudes et des réformes structurelles sont nécessaires, ainsi qu'un cadre législatif solide pour renforcer les dispositifs de lutte contre la fraude. Mots-clés : Fraude, Assurance, Algérie, Lutte contre la fraude, Cadre législatif. Codes de classification JEL : G220, K420. Abstract : The challenge of combating insurance fraud persists, notably in Algeria, despite market growth. This impact companies, policyholders, and the economy. Definitions of fraud vary but emphasize its deliberate nature and adverse effects. Internal obstacles like ineffective systems and human resource management gaps hinder prevention and detection efforts. Early fraud detection and structural reforms are essential, alongside a robust legislative framework to strengthen prevention mechanisms. A strategic approach, integrating technology and fostering cooperation among stakeholders, is crucial to mitigate fraud's impact and ensure the insurance market's sustainability in Algeria.
Purpose: The the overall objective of this study was to establish challenges facing the growth of the insurance sector in Kenya.Methodology: The study adopted a descriptive survey design. A descriptive survey study design was used. A population of 43 insurance firms was given. A sample of 21 firms (50 percent), were chosen from the population. This was done using the random sampling approach. The collected data was analysed by the use of statistical package for social science (SPSS) computer software for data analysis by use of tables, frequencies and percentages. Questionnaires were used and data analysed using descriptive statistics.Results: Based on the findings it was possible to infer that not only are regulatory hitches affecting the growth of the insurance sector, the sector is also faced by other challenges ranging from lack of awareness by the public, excessive claims, fraud and competition.Unique contribution to theory, practice and policy: The study recommended that insurance firms should increase their budgetary allocations to boost awareness and publicity. In addition, the insurance sector should stream line its operations and processes in order to enhance customer satisfaction. Furthermore, the Ministry of finance and the Insurance Regulatory Authority should institute and implement reforms in the sector. The researcher further recommends a benchmark study on the ways that other countries have revamped the insurance sector and the necessary reforms.
Insurance Fraud is scariest threat to most of the insurance companies. These companies are facing increasing fraudulent
cases of insurance from past few years. These fraudulent cases increase the cost of premium which causes enormous
problems to both policy holder and also to insurance companies. Such insurance fraud cases involve unauthorized and unlawful act. Risk
management plays a crucial role in insurance industry to counteract these illegal activities. Thus, insurance companies are advised to use these risk
managements plan for prevention of insurance fraud. The present study on insurance fraud can be used to analyze risk assessment and fraud
pattern also prevention techniques used by organization. The reason of this study is to examine variety of insurance fraud and threat associated
with it and formulation of risk management plans to reduce the insurance fraud to smallest possible degree.
This paper categorises, compares, and summaries from almost all published technical and review articles in automated credit card fraud detection within the last twenty-five years. It defines and formalises the main types of known credit card fraud, and discusses the issues of credit card data. Also, methodologies and techniques for employed in credit card fraud and their performance evaluations are analysed. Compared to all related reviews on fraud detection, this survey covers much more technical articles and is the only one, to the best of our knowledge, which discussed extensively on the issues of credit card online transactions.
This chapter is dedicated to the comprehensive survey on the current state-of-the-art in the field of animal biometrics. In addition to this, we have provided a brief introduction to the discipline of animal biometrics followed by the classification and identification techniques of species or individual animal using the discriminatory set of their biometric features in brief. Further, the potential challenges of existing methods and research communities, tools, and data sharing are also discussed.
The psychology of insurance decision making is a domain of utility-based theories such as subjectively expected utility (SEU) and prospect theory, and of those based on bounded rationality and psychological processes, such as the positive theory of insurance demand. This chapter reviews research (including the mentioned theories) on the psychology of insurance as a risk protection decision. Insurers themselves can be influenced in ways which encourage them to put others at risk, including their policyholders, employees, competitors, and government regulatory machinery. From this broader perspective, both mis-selling and fraudulent claims can be seen as part of the intrinsic and embedded problem of moral hazard that infuses insurance behaviour and society. This chapter considers the nature and causes of insurance mis-selling and reviews approaches to consumer protection. Following this, it also considers the role of evolving government regulatory activity, and the practices of insurance firms to prevent moral hazard and insurance fraud.
Despite the growing volume of studies on fraud there has been very little research focusing on insurance fraud.1 The scholarly work that has been undertaken (Clarke, 1989, 1990; Litton, 1990) has brought important progress but empirical work is scarce. Neither insurance companies, the police or other agencies have provided details of the extent of insurance fraud (in part a reflection of the fact that as an offence it is both difficult to identify and to prove). Moreover, in the past, insurers have tended to play down the problem, at least publicly. Hence, little is known about the motivations of insurance fraudsters and their perception of the insurance industry, nor the patterns or the extent of this offence. It is a poor base on which to build prevention strategies.
Insurance fraud occurs when the insurer does not know all the facts about the insured and the claim, and when the fraudster believes that some monetary benefits can be gained by distortion of such facts. We explain how fraud can be fought with deterrence and detection, and present several ways to control fraud, specialized investigation units, statistical analysis of claims information, and fraud detection methods, together with the ways for evaluation of their performance and some hints for their practical implementation. Also, we give an overview of the claims handling process. We describe various types of fraud currently encountered in insurance and give examples.
Nachdem zunächst einige Persönlichkeitseigenschaften deutlich geworden sind, die das Thema Betrug zwar beeinflussen, aber nicht nur mit Versicherungen zu tun haben, geht es nunmehr um die expliziten Einstellungen gegenüber dem Thema Versicherung.
Dieses Kapitel wird sich mit Fragen beschäftigen wie: Welches Bild haben Kunden von der Versicherungsbranche? Was denken sie über die Zahlungsmoral und Gewinnabsicht der Versicherer? Verstehen Menschen eigentlich, wie eine Versicherung funktioniert und worin ihr eigentlicher Sinn besteht? Wie sehr haben sie das Gefühl, ihr Geld sinnvoll auszugeben und welche Gefühle haben sie gegenüber Versicherungen?
Einstellungen lassen sich auch als personenspezifische Merkmale verstehen, sind aber wesentlich variabler als Persönlichkeitsmerkmale wie die im vorherigen Kapitel beschriebenen. Das heißt, auch in diesem Kapitel geht es noch in relativ weitem Umfang um Eigenschaften eines (potenziellen) Versicherungsbetrügers. Allerdings werden hier zum ersten Mal Aspekte angesprochen, die einerseits künftig noch mehrMenschen zum Betrug animieren könnten, aber welche die Versicherungsbranche andererseits auch beeinflussen könnte, um Betrug vorzubeugen.
Nachdem klar geworden sein dürfte, warum und wie es dazu kommt, dass auch „ganz normale“ Menschen zum Versicherungsbetrüger werden, kann darauf aufbauend auf Betrugspräventionsstrategien eingegangen werden.
Spätestens seit den 1990er Jahren sind sich Versicherer der Problematik des alltäglichen Versicherungsbetruges durchaus bewusst. Als eine Studie der GfK 1987 zum ersten Mal das Ausmaß des Versicherungsbetruges in Deutschland aufdeckte (welches bereits damals erschreckend hoch war), sagte der damalige Bundesjustizminister dem Betrug offiziell den Kampf an und kündigte an, man wolle Versicherungsbetrug nicht als das behandeln, als was er öffentlich wahrgenommen würde, nämlich als Kavaliersdelikt. De facto aber tat sich wenig. Zwar wird Betrug seit einigen Jahren von Versicherern nicht mehr stillschweigend hingenommen, allerdings wird er dennoch kaum präventiv bekämpft. Bevor wir uns möglichen Präventionsmaßnahmen widmen, gibt dieses Kapitel zunächst einen Überblick über die derzeitigen (Stand 2013) Betrugsabwehr-Strategien der Versicherungsbranche.
Im vorherigen Kapitel haben wir uns damit beschäftigt, wie die Wahrnehmung der Versicherungsbranche und der Versicherungsprinzipien die Betrugsbereitschaft beeinflussen; nachfolgend soll untersucht werden, wie sich die Wahrnehmung des Verhaltens anderer Kunden auf die Betrugsbereitschaft auswirkt. Denn auch die Vorstellung darüber, wie verbreitet Versicherungsbetrug ist, kann beeinflussen, ob jemand selbst einen Versicherungsbetrug begeht oder nicht.
The centrality of criminal law to policing is captured most succinctly by the fact that police organizations are often referred to simply as « law enforcement » agencies. This paper offers a different view of the relationship between law and policing. Criminal law has become secondary to other legal regimes used to manage risk. The police become communicators of risk-relevant knowledge to institutions external to the police organization. These institutions use such knowledge to manage a plethora of risks. As a result, the model of law which is increasingly operative is compliance-based, rather than focusing on deterrent law enforcement. The insurance industry serves as an example of these wider trends in governance.
Whereas “organized” insurance fraud is well described in the existing criminological literature, far less attention has been devoted to “opportunist” insurance fraud. This paper considers the limitations of current theoretical frameworks for understanding the phenomenon of “opportunist” insurance fraud; it analyzes the existing literature and describes how a political economy perspective can assist our understanding of complex “problem” formation and reaction in this field. A heuristic ideal-type comparison of insurance-taking and fraud is undertaken across three countries (Finland, the UK, and Taiwan) and the findings related to our explanatory framework.
The efforts to tackle the growing problem of insurance fraud have focused primarily on examining suspicious claims and claimants after the accident has happened, ignoring a risk-reduction opportunity that exists even before the policy is purchased. The current paper aims to address this gap. In Study 1, a group of 40 participants were asked to input their personal details on a simulated comparison site. It showed that the numbers of obtained online quotes (i.e., how many times participants obtained them) and time spent to produce them by completing all the relevant information were positively correlated with misrepresentation of personal details for financial gain. In Study 2, a separate group of 120 participants took part in navigating a different simulated comparison site. The results suggest that equipping the site with mere appearances of online surveillance reduced the time that they took to input their details and minimized their manipulation for financial gain. Elaborating on the important theoretical and practical implications, the paper identifies a relatively easy and effective method of discouraging prospective policyholders from misrepresenting their details online.
It is investigated the problem of insurance fraud as the product of the product of motivation and possibilities under the conditions of information asymmetry. The definition of the insurance fraud has been done with taking into account of the role of insurance market entities. Author classified the insurance fraud and showed the degree of regulation difficulties related to the insurance fraud counteraction. It is substantiated the reasonability of creation of the insurance detective agency as a necessary element of the safety mechanism and insurance fraud counteraction. The scheme of interrelations between a insurance detective agency, market subjects and public authorities has been built.
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Исследована проблема страхового мошенничества, как продукт мотивации и возможностей в условиях асимметрии информации. Дано определение понятия «страховое мошенничество» с учетом роли субъектов страхового рынка. Проведена классификация страхового мошенничества и показана сложность регулирования процессов борьбы с мошенничеством. Обоснована целесообразность создания страхового детективного агентства как необходимого элемента механизма безопасности и противодействия страховому мошенничеству. Построена схема взаимоотношений между страховым детективным агентством, субъектами рынка и органами контроля.
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Досліджено проблему страхового шахрайства, як продукту мотивації і можливостей в умовах асиметрії інформації. Визначено поняття «страхове шахрайство» з урахуванням ролі суб'єктів страхового ринку. Здійснено класифікацію страхового шахрайства і показано складність регулювання процесів боротьби із шахрайством. Обґрунтовано доцільність створення страхового детективного агентства як необхідного елемента механізму безпеки і протидії страховому шахрайству. Побудовано схему взаємовідносин між страховим детективним агентством, суб'єктами ринку і органами контролю.
Several numerical approaches have been proposed in the literature to simulate the behavior of modern blast furnaces: finite volume methods, data-mining models, heat and mass balance models, and classical thermodynamic simulations. Despite this, there is actually no efficient method for evaluating quickly optimal operating parameters of a blast furnace as a function of the iron ore composition, which takes into account all potential chemical reactions that could occur in the system. In the current study, we propose a global simulation strategy of a blast furnace, the 5-unit process simulation. It is based on classical thermodynamic calculations coupled to a direct search algorithm to optimize process parameters. These parameters include the minimum required metallurgical coke consumption as well as the optimal blast chemical composition and the total charge that simultaneously satisfy the overall heat and mass balances of the system. Moreover, a Gibbs free energy function for metallurgical coke is parameterized in the current study and used to fine-tune the simulation of the blast furnace. Optimal operating conditions and predicted output stream properties calculated by the proposed thermodynamic simulation strategy are compared with reference data found in the literature and have proven the validity and high precision of this simulation.
Despite the influence of Heclo and a few other scholars, traditional conceptions of policy-making have failed to link the intellectual and political, economic and institutional aspects of the process by close ties of mutual relevance... The failure to link together ideas and events has seriously reduced the ability of these models to explain how policies change (Majone 1989: 148).
Summary Applications of fuzzy set theory (FST) to property casualty and life insurance have emerged in the last few years through the work of Lemaire (1990), Cummins and Derrig (1991, 1993) and Ostaszewski (1993). This paper continues that line of research by providing an overview of fuzzy pattern recognition techniques. We utilize them in clustering for risk and claim classification. The classic clustering problem of grouping towns into rating territories (DuMouchel (1983), Conger (1987)) is revisited using these fuzzy methods and 1988-1991 Massachusetts automobile insurance data. The new problem of classifying claims in terms of suspected fraud is also addressed using these same fuzzy methods and data drawn from a study of 1989 bodily injury liability claims in Massachusetts.
Money creates the incentive, and information asymmetries between the insured and the insurer create opportunity for insurance fraud. Here we describe the types of fraud that are currently encountered and we give some examples of insurance fraud. We discuss the difference between fraud and abuse. We present how to fight fraud with deterrence and detection. We give a brief description of the claims handling process. Several ways to control fraud are presented: specialized investigation units; statistical analysis of claims information and fraud detection methods. We show how to evaluate the performance of fraud detection models, and discuss their practical implementation.
The nature and prevalence of insurance fraud has been studied only to a limited extent, even in the USA and Europe. Nevertheless, national authorities have pressed ahead with various approaches to control such fraud. This paper briefly outlines the nature and difficulties around measurement of insurance fraud and reviews key international trends in the regulation of fraud. It then presents the findings of an empirical study of insurance fraud in Taiwan and recent proposals for anti-fraud control. It analyses these findings in the context of actual practices of insurance companies which give evidence to the idea that ‘moral hazard’ is embedded in the institutional arrangements, social relationships, and moral economies of private insurance.
The role of legitimacy in international relations is a topic of much debate, yet there is little understanding of the mechanism behind it. Here I address this discrepancy by asking: are state threats perceived as (il)legitimate more or less likely to be successful? By operationalizing illegitimacy as unilateral action in the presence of a multilateral option, I consider the variation in the success of U.S. trade measures from 1975 to 2000. As I show, the (il)legitimacy of threats modifies the nature of the signal sent by concessions to those threats, and this effect can be measured and predicted. I find that, controlling for material pressure, perceived illegitimacy of U.S. trade threats decreases the likelihood of a target conceding by over 34 percent. Moreover, it pays to resist: targets that resist illegitimate unilateral measures from the United States are 25 percent less likely to encounter similar unilateral measures over the following five years.
Contexte et objectif. L’évasion fiscale a généré des pertes annuelles variant entre 2 et 44 milliards au Canada entre 1976 et 1995. Avec la croissance de l’évasion fiscale dans les années 1980 et 1990 plusieurs législations se sont attaquées à ce phénomène en mettant en place des mesures telles que les amnisties, les réformes fiscales et les nouvelles lois. Ces dernières reposent non seulement sur des principes théoriques distincts, mais leur efficacité même est remise en question. Bien que plusieurs auteurs affirment que les criminels en col blanc sont réceptifs aux sanctions pénales, une telle affirmation repose sur peu de preuves empiriques. L’objectif de ce mémoire est donc de réaliser une synthèse systématique des études évaluatives afin de faire un bilan des lois fiscales et d’évaluer leurs effets sur la fraude fiscale. Méthodologie. La synthèse systématique est la méthodologie considérée comme la plus rigoureuse pour se prononcer sur l’effet produit par une population relativement homogène d’études. Ainsi, 18 bases de données ont été consultées et huit études ont été retenues sur les 23 723 références. Ces huit études contiennent neuf évaluations qui ont estimé les retombés des lois sur 17 indicateurs de fraude fiscale. L’ensemble des études ont été codifiées en fonction du type de loi et leur rigueur méthodologique. La méthode du vote-count fut employée pour se prononcer sur l’efficacité des lois. Résultats. Sur les 17 indicateurs, sept indiquent que les lois n’ont eu aucun effet sur l’évasion fiscale tandis que six témoignent d’effets pervers. Seulement quatre résultats sont favorables aux lois, ce qui laisse présager que ces dernières sont peu efficaces. Toutefois, en scindant les résultats en fonction du type de loi, les réformes fiscales apparaissent comme une mesure efficace contrairement aux lois et amnisties. Conclusion. Les résultats démontrent que les mesures basées sur le modèle économique de Becker et qui rendent le système plus équitable sont prometteuses. Les amnisties qui visent à aller chercher des fraudeurs en leur offrant des avantages économiques et en suspendant les peines sont non seulement inefficaces, mais menaceraient le principe d’autocotisation basé sur l’équité. Introduction and objectives. Between 1976 and 1995, tax evasion has generated losses varying between 2 to 44 billions in Canada. In order to stop the upward trend observed in tax evasion in the 1980s and 1990s, several jurisdictions introduced legal measures such as amnesties, tax reforms and new legislations. Not only these measures rest on different paradigms but their effectiveness has yet to be proven. While it is generally argued that threats of legal sanctions are effective to deal with offenders involved in economic crimes, such a claim rests on weak empirical evidence. By conducting a systematic review, the objective of this thesis is to further our understanding about the effect of tax laws on tax evasion. Method. Systematic review is referred to as the most suitable method to review a body of literature on a given subject and to determine its effect on a particular outcome. We searched 18 databases that led to the identification of 23,723 references. Overall, 8 studies containing 9 evaluations met inclusion criteria and were kept for the review. These studies assess the effect of tax laws on a total of 17 variables. All studies were assessed based on the type of law and their methodological robustness. The vote-count method was then used to identify effective measures. Results. Out of the 17 outcomes, 7 indicate that laws have no effect on tax evasion while 6 show increases in tax evasion indicators. Only 4 outcomes were in the expected direction. On the other hand, by grouping results according to the type of measures, tax reform appears as the only effective intervention. Conclusion. Our results suggest that programs based on Becker’s economic model and that promote equity are promising. Amnesties seeking to identify tax evaders by offering economic advantages and sanction immunity are not only ineffective but could compromise a system based on self-assessment, which rest on the principle of perceived equity.
Forensic Biomechanics is an analytic method intended for presentation in a court of law. The method consists of the reconstruction of an injury mechanism followed by a comparison between the injury risk of the mechanism and the injury tolerance of the individual. In recent years some courts have excluded such testimony based, in part, on the inability of experts to quantify the potential error of the methods they relied upon in reaching their conclusions. The application of Bayes' Law to a forensic test of truth in a disputed matter allows for quantification of the error inherent in the method through the conditioning of the pre-test probability of the test outcome with the true and false positive rate of the test. The result of the calculation is the Error Odds (O(E)) for the test, or the ratio of correct to incorrect tests. We present an Error Odds analysis of seven previously published case studies in Forensic Biomechanics as an illustration of the utility of the O(E) as a metric for admissibility of testimony in the courts, with a minimum Error Odds ratio of 10 proposed as a threshold. The results of our analysis yielded only 1 of 7 cases of applied Forensic Biomechanics that surpassed the threshold for admissible testimony of 10, with most the cases falling below an O(E) of 3. The results of the present study suggest that the forensic application of biomechanics is potentially fraught with error. We suggest that an Error Odds analysis be incorporated in Forensic Biomechanics as part of the analysis as a form of quality control and as demonstrable evidence of the accuracy of the methodology.
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