United We Brand

Executive summary

Insurance fraud is one of America's most-damaging crimes. These swindles cost at least $80 billion a year, and rob honest citizens of their life savings and jobs. Victims also die from fraud schemes. They also face shame and despair that can last years. Families are broken up when schemers are jailed, as well. Insurance fraud also is far-reaching: It victimizes people from all strata of our society, and is committed by people from all strata. Equally concerning, a large percentage of Americans tolerates this crime, consumer attitude research consistently shows.
United We Brand

Unified campaign

Public outreach can be a powerful tool for helping deter people against insurance schemes, and reducing this crime's damage. But current outreach efforts around the U.S. are fragmented. Anti-fraud groups now have widely varied budgets, staff sizes and expertise. Truly campaign-style efforts backed by longterm planning and rigorous research also are relatively rare.

To close this gap, fraud fighters should explore joining forces to launch a unified national outreach campaign. By pooling their talents and resources, fraud fighters can better identify the problems that need addressing; apply more science and funding to the effort; and attack fraud with a truly campaign- level strategy.

The effort could take many approaches. For example, it could focus on deterring specific classes of swindlers such as normally honest people who commit so-called "soft" fraud. It also could work to empower specific groups that are often victimized, such as seniors, Hispanics or Asians. The campaign could target specific fraud schemes such as staged-accident rings, fake thefts of vehicles by owners, or bogus workers compensation claims. Another approach is to target entire lines of insurance, such as automobile or workers compensation.

But fraud fighters first must determine if a unified national campaign is feasible. One factor is high cost: The effort could easily scale up to tens of millions of dollars a year. The effort also is time-intensive; will stakeholders make the commitment to launching a large campaign and sustaining it well into the future?

Rigorous research

Whatever the campaign's focus, all phases must be based on credible research. One key area involves anti-fraud messages. Most fraud fighters now use variations of two basic messages: "Insurance fraud costs everyone money," and "You'll get caught and go to jail." But the second message may be off- target. Many would-be swindlers are more worried that being convicted will hurt their kids and expose the schemers as unfit family members, according to statewide research by the Pennsylvania Insurance Fraud Prevention Authority. If the first message may be ineffective, how can fraud fighters be certain the "cost-you-money" message works either? More research is needed to ensure fraud fighters are using valid messages and other tactics.

Research also will help better measure campaign results. Campaign organizers will need to decide which metrics are accurate, measurable and achievable. Fraud fighters should consider success indicators such as fraud convictions, changes in people's attitudes about a targeted scheme, volume and quality of news coverage, calls to fraud hotlines, claiming behavior, impact on premiums and ad recall.

Careful planning

Managing such a large effort will require careful planning. One issue is to identify and involve key stakeholders, and determine what decisionmaking and advisory roles they should play. Among the stakeholders are insurers, national anti-fraud groups, state organizations such as insurance departments and their fraud bureaus, federal agencies such as the FBI, and public-interest groups that represent major constituents such as seniors, Hispanics and Asians.

Creating a workable outreach agenda and setting clear lines of authority will be among the many other major challenges. There are numerous management models such as a permanent steering group; having an existing outside group chair the operation; and creating an entirely new group to manage the campaign.

A relatively small and informal steering group of leaders should address the startup issues such as determining the campaign's feasibility, creating a management structure, securing funding, conducting initial research and designing a pilot campaign.

The leadership council could shift focus and become a center of research and development for the entire anti-fraud community if the national effort proves unfeasible. This would place the best strategic ideas and outreach tools at the fingertips of fraud fighters throughout the U.S.

This group could conduct practical research to share with all fraud fighters. What motivates and deters fraud criminals, and what messages do consumer segments respond to, and not respond to? Developing outreach tools could be another core mission. Interactive website features, public service announcements, anti-fraud ads and manuals with practical campaign ideas are just some of the useful outreach tools.

Large potential benefits

Fraud fighters have their greatest impact when they join forces and apply focused pressure on a problem. Creating a national outreach campaign holds this same promise. Insurance fraud is so vast that even relatively modest changes in behavior and attitudes could yield enormous aggregate benefits that more than justify the investment. It's an ambitious vision, and one that can help increase the impact of fraud fighting for years to come.

Download pdf of full report