“Nearly one of four Americans say it’s OK to defraud insurers,” says a recent survey by the consulting firm Accenture Ltd. That survey was featured earlier this year in dozens of popular press, consumer media, business news wires, and televised news outlets.
Furthermore, the article quoted Michael Lucarini, an Accenture partner, saying, “The Insurance Services Office, Inc. estimates that the cost of fraud in the U.S. property and casualty industry is approximately $24 billion, which represents 10 percent of total claims payments.”
A staggering number to be sure, the Coalition Against Insurance Fraud, which not only tracks P&C issues but also the larger insurance fraud universe, says the problem is even bigger — $80-billion or more.
Regardless, insurance fraud is a growing concern. It not only affects insurance companies, but ultimately every insurance buyer who ends up paying higher premiums. For example, the Coalition cites a Rand Institute study that says that more than one-third of auto accident victims exaggerate their injuries, which alone adds $13-18 billion to annual insurance payouts.
The Coalition Against Insurance Fraud started in 1993. The organization bills itself as “the nation’s only anti-fraud watchdog that speaks for consumers, insurance companies, legislators, and regulators.” The Coalition has helped enact anti-fraud legislation, educate consumers and insurance professionals, and has become a national clearinghouse for fraud information.
Excellent Web resource for agents
The Coalition’s Web site (www.insurancefraud.org) is a good example of simplicity, logical grouping, good content organization, and simple navigation. General information about the Coalition is arranged in a horizontal menu across the top of the screen, while specific content categories are arranged in a vertical menu along the left side. The overall look and feel is consistently applied throughout the site. Especially noteworthy are the simple and consistent text formatting and paragraph “chunking” that aid readability. Agents could learn a lot about effective Web site design and navigation by studying this site.
More importantly, this site is a one-stop resource for insurance fraud, providing a wealth of information for insurance professionals and consumers alike. As might be expected, hundreds of statistical tidbits illustrate the scope of the fraud problem. Also, a variety of PDF downloads provide helpful background, analysis, insight, and how-tos for combating fraud.
Agents and insurance fraud
One study on public attitudes called “Four Faces: Why Some American Do — and Do Not — Tolerate Insurance Fraud” (Four Faces.pdf ) concluded that insurance agents are the most admired segment of the industry. According to the Coalition, “agent groups could be a source of mass media messages and also provide a grassroots level of credible anti-fraud education….”
With that in mind, agents might want to include a link to the Coalition from their agency Web sites. Though a passive educational tool, interested consumers could learn about the insurance fraud problem. Also, an agency newsletter could include information and quotes from the Coalition’s Web site. For agents who want to be more proactive about fraud education, the Coalition provides a free video and up to 100 free fraud education brochures to non-members (insurancefraud.org/video).
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