Americans find insurance fraud palatable

About one-quarter of Americans say insurance fraud is acceptable, according to a new survey from Accenture. In a random sample of 1,000 adults, the study found that nearly 25% think its alright to overstate the value of a insurance claim, and more than one-tenth say its acceptable to claim for items that were not lost or damaged, or treatments that were never received.On the motivation for insurance fraud, 66% say that people are more likely to commit fraud during an economic downturn, and almost half think people commit fraud because they can get away with it. The need for money is a prime motivation say 30% of respondents, while 24% link the crime to the view that people pay too much for insurance, and 20% link overstated claims to compensation for having to pay a deductible.”The Insurance Services Office, Inc. (ISO) estimates that the cost of fraud in the U.S. property and casualty industry is approximately US$24 billion, which represents 10% of total claims payments,” notes Michael A. Lucarini, a partner in Accenture’s insurance practice. “Fraud is a growing concern for insurers, whose aging technology and inefficient processes often prevent them from detecting fraudulent claims, which in turn hurts their long-term profitability. In addition, increased consumer exaggeration to improve the claims payout is becoming more prevalent in the current weakened economy.”More than one-tenth of respondents know someone who has committed insurance fraud, mainly for auto or homeowners’ claims. And 40% said they probably would not report someone who had inflated a claim. An overwhelming majority of respondents think that insurance companies have the resources to prevent and detect fraud already, causing Lucarini to comment, “the burden is clearly on insurance companies to ensure they have the proper tools, technologies and skills to combat fraud”.