Who commits insurance fraud and why
Matthew Smith from the Coalition Against Insurance Fraud outlines a new study examining how bad actors commit fraud and then justify their actions.
ALM’s Insurance Speak podcast celebrates its 100th episode with our latest conversation with Matthew Smith, executive director of the Coalition Against Insurance Fraud. Over the last several years, the podcast has covered a wide variety of topics ranging from marketing, insurtechs, commercial claims, cyber and emerging risks to the impact of nuclear verdicts, the role of trauma-informed care and so much more.
This episode tackles the subject of insurance fraud, which costs a staggering $308.6 billion annually, and is a cost that everyone bears. The Coalition Against Insurance Fraud, in conjunction with Verisk and Dynata, recently released a new study entitled, Who Me? Who Commits Insurance Fraud and Why, that helps to answer some questions on what motivates individuals who engage in defrauding companies.
“There is always a financial motive behind insurance fraud,” explains Smith, and the study examines “what drives them to think that it is okay to engage in fraud.”
He continues, “We never did a study that surprised us more. Eighty-four percent of all U.S. consumers view it as a crime, but 16% do not view it as a crime, which translates into 53 million Americans.”
Smith shares that the dividing line between how consumers view insurance fraud falls at the age of 45. Those who were older viewed it as a crime. Consumers under the age of 45 were more likely to be envious of those who committed fraud or consider committing it themselves.
“People who would never consider other crimes think insurance crimes are acceptable,” he adds. Some justify their actions because they believe insurers have not treated them fairly, so they see it as a way to balance the scales.
Smith also highlights some of the Coalition’s major accomplishments over the last 30 years and discusses his impending retirement scheduled for the end of this year.
To hear more about the study and how views of fraud are changing, listen to the podcast above or subscribe to Insurance Speak on Spotify, Apple Music or Libsyn.
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