Go figure: fraud data

Consumer attitudes

Consumer tolerance of insurance fraud has increased in recent years, public-opinion polls reveal. Accenture’s 2010 consumer survey is the latest research to reinforce this finding:

• More than half (55 percent) of U.S. consumers say poor service from an insurance company is more likely to cause a person to defraud that insurer;

• More than three-quarters (76 percent) say they’re more likely commit insurance fraud during an economic downturn than during normal times (up from 66 percent in 2003);

• More than two-thirds of consumers (68 percent) say they believe insurance fraud happens because people believe they can get away with it (up from 49 percent in 2003);

• Some 72 percent of consumers believe insurance companies are capable of identifying fraud (down from 83 percent in 2003). (Accenture Ltd., 2010)

In other research:

1. One of five U.S. adults — about 45 million people — say it’s acceptable to defraud insurance companies under certain circumstances. Four of five adults think insurance fraud is unethical. (Four Faces of Insurance Fraud, Coalition Against Insurance Fraud, 2008)

1. Nearly one of four Americans says it’s ok to defraud insurers (8 percent say it’s “quite acceptable” to bilk insurers, and 16 percent say it’s “somewhat acceptable.”) (Accenture, 2003)

1. About one in 10 people agree it’s ok to submit claims for items that aren’t lost or damaged, or for personal injuries that didn’t occur. Two of five people are “not very likely” or “not likely at all” to report someone who defrauded an insurer. (ibid)

Consumer tolerance of specific insurance schemes has increased over the last 10 years, reveals the Four Faces study. There is a decline in the number of Americans who think it’s unethical to:

1. Misrepresent facts on an insurance application to lower their premiums (82 percent today, down from 91 percent in 1997);

1. File a claim for damage that occurred before the damage was covered (85 percent, down from 91 percent);

1. Inflate a claim to cover the deductible (84 percent, down from 91 percent); and

1. Misrepresent an incident in order to be paid for an uncovered loss (84 percent, down from 92 percent).

Consumer attitudes toward insurance providers also have declined over the last 10 years, according to Four Faces:

1. 62 percent of people have a positive attitude about insurance companies (down from 72 percent in 1997); and

1. Fewer than two of five adults feel positively about the insurance industry as a whole (down from slightly more than 50 percent).

People who learn to lie while young are far more likely to commit insurance fraud later in life, says an October 2009 study by the Josephson Institute of Ethics. The study of 7,000 people is the first to connect teen behavior to dishonest activities in adulthood. Habits formed in childhood persist:

People who believe cheating and lying are necessary to succeed are more than three times as likely to inflate an insurance claim;

Young adults aged 18-24 are more than three times more likely to inflate a claim than adults over age 40; and

People who cheated on exams in high school two or more times are three times more likely to inflate an insurance claim later in life. (Character Study Reveals Predictors of Lying and Cheating, Josephson Institute, 2009)