Businesses want their customers to self-report information honestly. One increasingly popular way to stimulate desired behavior is by using nudge interventions. But can customers be nudged to self-report information more honestly? This is currently a debate in the literature, where empirical results are inconclusive. Building on related literature on nudges, we add to this debate with a controlled field experiment (N = 5704). We used data from actual customers making real decisions when they file claims online to a large Nordic insurance provider. To the best of our knowledge, this is the first study to investigate the effects of honesty-nudges on self-reported information when filing insurance claims using a controlled field experiment. We designed and tested three honesty-nudges on insurance customers: (1) signing-atthe-beginning, (2) a descriptive social norm message, and (3) a solidarity message.Across five outcome measures, we found that the honesty-nudges, standalone or in any possible combination, do not have significant effects in reducing indicators of insurance claims fraud. But interestingly, customers in all treatment groups used significantly more characters to describe losses than customers in the control group. Also, in post hoc analyses, we found signs that the direction of nudge effects varies across customers' age and customer loyalty.
| INTRODUCTIONInsurance companies want their customers to not falsely report or exaggerate damages when they file claims. Fraudulent claims cost the insurance provider because those increase settlement costs. These can also cost honest customers as providers increase premiums to cover extra costs. In 2017, fraudulent claims cost European insurers and customers an estimated 13 billion Euros (Insurance Europe, 2019a). Finance Norway (Finanse Norge, 2019) estimates the total value of detected fraudulent non-life insurance claims in Norway at NOK 495.1 million (approximately 49 million Euros) in 2019. The total value of undetected yearly insurance fraud in Denmark is estimated to be 10 times that of detected-300 million Euros versus 32.75 million Euros 1 (Insurance Europe, 2019b). The Federal Bureau of Investigation (2020) estimates the cost of non-health insurance fraud in the United States at over 40 billion USD. Dealing with insurance claims fraud is difficult because providers rely on self-reported information and customers have economic incentives to report false or exaggerated damages. 1 Estimates were in Euros than in Danish Kroners for uniformity in comparing figures across countries.