Insurance Claims Fraud in Homeowner’s Insurance: Empirical Evidence From the Nigerian Insurance Industry

Abstract

This study examines insurance claims fraud in homeowner’s insurance with its empirical findings from the Nigerian insurance industry. In this study, a descriptive research design was employed while purposive sampling method was adopted for information selection. A structured questionnaire was used for data collection. 221 participants were drawn from 31 insurance companies, which were basically general insurance companies that represent 61% capacity of the industry in terms of market structure. Major statistical techniques employed in the study were simple frequency percentage and T-test statistics. While five relevant research questions were stated and to which verbal interpretation were provided, added with supporting evidence, two hypothetical statements were made. The study recommends that effective fraud deterrent should be in place so as to promote stable, confidence-based, result-oriented and trustworthy market environment, and government on its own part must not fail to exhibit the will-power to drive the anti-fraud strategy designed, built and modeled for the operational efficiency of insurance companies and effective service delivery in the heart of the insuring public. This research work contributes to existing knowledge in that it helps broaden the scope of the regulatory bodies on the need to continually engage academia, insurance practitioners, IT experts and other stakeholders in designing and building a more sustainable anti-fraud strategy in improving insurance market penetration and density.

Claims Settlement and Risk Attitudes: Evidence from the Motor Insurance Policyholders

“…Claim is seen as a request for paying the delivery of either goods purchased or services provided (DiNapoli, 2013). It is referred to as a demand made by a policyholder on an insurer concerning his/her entitlement under an insurance contract (Ajemunigbohun, Isimoya, & Ipigansi, 2019). Singh (2012) maintains that claims can be properly settled when an insurer provides state-of-the-art claims mechanisms that are in alignment with robust business dynamics, and detailed managerial systems that will enhance the efficiency and efficaciousness of claims settlement processes.…”

Inadequate Insurance Claims Reserving and Financial Distress in Non-Life Insurance Companies in Kenya: A Structural Equation Modeling Approach

“…Several articles in the literature have investigated the reason why non-life insurance companies manipulate loss reserves (Ajemunigbohun et al, 2019;England et al, 2019). The results of these studies suggest a significant manipulation of loss reserves by non-life insurance companies (Fiordelisi et al, 2013).…”

Assessing Financial Resource Capability on Insurance Claims Management in Nigeria: The Moderating Role of Information Technology

“…The low levels of solvency and inability to acquire relevant information technology infrastructure that can improve efficiency and effectiveness in the claims management process calls for urgent attention to save the industry from collapse. Most previous studies have tended to concentrate on claims fraud, inadequate capital and lack of skilled personnel (Ajemunigbohun, S.S., Isimoya, A.O. & Ipigansi, P. M., 2019;Oke, 2012) as the major cause of poor insurance claims management in Nigeria without considering the impact of financial capacity and the role of information technology in enhancing the claims management process.…”

“…Insurance companies are duty bound to investigate the circumstances leading to a loss before making any claims payment to avoid being defrauded. Claims fraud abound in the insurance industry worldwide either as sole operators or syndicate fraud which has led to huge losses in the industry (Ajemunigbohun, Isimoya & Ipigansi, 2019). Kuria and Morange (2014) believe that fraud is an omission or intention by a person to gain an undue advantage through dishonest dealings by knowingly hiding, suppressing, misrepresenting, destroying, non-disclosure of material facts relevant to a transaction and abusing financial responsibility or the position of trust occupied by the official.…”

“…An efficient claims management system is required to ensure that a model for effective fraud prevention, detection and control is put in place by an insurance company. It also requires that proactive measures are taken to deal with genuine claims, minimize unnecessary costs, handle claims expeditiously, reduce delays and disputes, minimize the costs of litigation and make robust plans for prompt settlement of claims (Ajemunigbohun et al, 2019;Angima & Mwangi, 2017;Leverty & Grace, 2012).…”