Reducing the risk of insurance fraud by appearances of online surveillance

Abstract

The efforts to tackle the growing problem of insurance fraud have focused primarily on examining suspicious claims and claimants after the accident has happened, ignoring a risk-reduction opportunity that exists even before the policy is purchased. The current paper aims to address this gap. In Study 1, a group of 40 participants were asked to input their personal details on a simulated comparison site. It showed that the numbers of obtained online quotes (i.e., how many times participants obtained them) and time spent to produce them by completing all the relevant information were positively correlated with misrepresentation of personal details for financial gain. In Study 2, a separate group of 120 participants took part in navigating a different simulated comparison site. The results suggest that equipping the site with mere appearances of online surveillance reduced the time that they took to input their details and minimized their manipulation for financial gain. Elaborating on the important theoretical and practical implications, the paper identifies a relatively easy and effective method of discouraging prospective policyholders from misrepresenting their details online.

Keywords:

• deception
• insurance fraud
• online shopping
• self-monitoring
• surveillance

Notes

1. Close surveillance was presented as ‘constantly monitoring software’. Loose surveillance was presented as ‘randomly monitoring software’. Given the absence of such software in the study, the surveillance was illusory rather than actual.

2. Computerized surveillance was presented as ‘highly dependent on monitoring software aimed at analyzing the likely veracity of the input’.