The following master thesis covers the psychological drivers of insurance fraud. In this scientific paper it shall be explained how insurance fraudsters try to vindicate their behavior and which forms of reasoning are therefor used. Insurance fraud itself is defined as a fraud to the detriment of an insurance company by the policy holder or a third party with the aim of obtaining unjustified coverage, demanding a false payment of damages on the merits or to the extent of paying a lower insurance premium. The fraudulent behavior starts with consciously inaccurate information during application and extends up to manipulation in the context of loss. The legal consequences of insurance fraud are the same as of any other fraudulent behavior, like a fine or a short period of imprisonment.
Furthermore the insurance company can claim indemnity demands or recourse or the insured can lose his coverage. It is reckoned that the annual losses of German insurance sector caused by insurance fraud are four billion Euro and that especially in the line of automobile insurance approximately every tenth notification of claim bases on fraudulent background. About 90 percent of insurance brokers report that they already were in contact with fraudulent clients and a common line in the insurance branch states that each tenth notification of claim contains fraud and that ten percent of payments are based on unjustified or fraudulent declarations. In social context insurance fraud is a damage for all insured clients. A higher rate of fraudulent behavior leads to more payments and in conclusion to higher premiums. The increased niveau of premiums furthermore reduces the public welfare of the insured and often leads to smaller profits for the insurance companies. Thereby many small deceptions have a high impact on the insurance companies, because costs of prosecution of these smaller delicts bear no proportion to the outcome.
Basically insurance fraud is not tolerated in society just as any other form of fraud. But on closer inspection and having a regard to the listed numbers concerning insurance fraud it becomes clear, that there exist different standards. In the Europe-wide European social survey 2010 87 percent of respondents declared that insurance fraud is wrong or absolutely wrong.
Inhaltsverzeichnis (Table of Contents)
- 1 Introduction
- 2 Main Part
- 2.1 Justification with the help of Broad Pervasiveness
- 2.1.1 Broad Pervasiveness of Insurance Fraud
- 2.1.2 Psychological drivers of Insurance Fraud on the supposition of Broad Pervasiveness
- 2.1.3 Behavior on the supposition of Broad Pervasiveness
- 2.2 Justification under assumption of Triviality
- 2.2.1 Dimensions of Insurance Fraud
- 2.2.2 Psychological drivers of Insurance Fraud on the supposition of Triviality
- 2.2.3 Behavior on the supposition of Triviality
- 2.3 Blaming the insurance as victim
- 2.3.1 Occurrence of the phenomenon of Blaming the victim
- 2.3.2 Psychological drivers of Insurance Fraud on the supposition of Blaming the victim
- 2.3.3 Behavior on the supposition of Blaming the victim
- 2.4 Negation of the victim
- 2.4.1 Negation of the victim in the context of Insurance Fraud
- 2.4.2 Psychological drivers of Insurance Fraud on the supposition of Negation of the victim
- 2.4.3 Behavior on the supposition of the Negation of the victim
- 2.5 Comprehension of the Principles of Insurance
- 2.5.1 Financial and insurance-linked education in the Population
- 2.5.2 Psychological drivers of Insurance Fraud under a lack of comprehension of the Principles of Insurance
- 2.5.3 Behavior under the lack of comprehension of the Principles of Insurance
- 2.1 Justification with the help of Broad Pervasiveness
- 3 Concluding Remarks
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This master thesis analyzes the psychological drivers of insurance fraud. It aims to explore how insurance fraudsters try to justify their behavior and which forms of reasoning are used. The study focuses on the five justifications: Broad Pervasiveness, Triviality, Blaming the Victim, Negation of the Victim, and Comprehension of the Principles of Insurance. The work further examines the psychological drivers behind these justifications and their impact on the actual behavior of insurance fraudsters.
- Justification of insurance fraud based on broad pervasiveness
- Moral and psychological justifications for insurance fraud based on the assumption of triviality
- Blaming the insurance company as a justification for fraudulent behavior
- Negation of the insurance company as a victim of fraud
- Justification of insurance fraud due to a lack of comprehension of the principles of insurance
Zusammenfassung der Kapitel (Chapter Summaries)
The study investigates the psychological drivers that motivate individuals to commit insurance fraud and how they rationalize their actions. The analysis delves into five primary justifications: Broad Pervasiveness, Triviality, Blaming the Victim, Negation of the Victim, and Comprehension of the Principles of Insurance. Each chapter delves into the psychological underpinnings of these justifications and their impact on the behavior of fraudsters.
- Chapter 1: Introduction introduces the concept of insurance fraud and its prevalence, highlighting the financial and societal consequences. It discusses the potential motives for committing fraud and the need to understand the psychological justifications used by perpetrators.
- Chapter 2: Main Part explores the five justifications for insurance fraud in depth. It examines how the perception of broad pervasiveness, the perceived triviality of the fraud, blaming the insurance company as a victim, negating the victim's existence, and a lack of comprehension of insurance principles contribute to the decision to defraud.
Schlüsselwörter (Keywords)
The core keywords and focus topics of this master thesis include insurance fraud, psychological drivers, justifications, broad pervasiveness, triviality, blaming the victim, negation of the victim, comprehension of the principles of insurance, financial education, moral reasoning, cognitive dissonance, and behavioral analysis. It examines the interplay of these factors in understanding and preventing insurance fraud.
- Quote paper
- Carolin Hutterer (Author), 2017, Psychological Drivers of Insurance Fraud, Munich, GRIN Verlag, https://www.grin.com/document/419067
