Perceived Ethicality of Insurance Claim Fraud: Do Higher Deductibles Lead to Lower Ethical Standards?

Miyazaki, Anthony D.

doi:10.1007/s10551-008-9960-4

Cited by 49 publications

(52 citation statements)

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“…2 Not only does meeting consumer privacy expectations increase purchase intentions and consumers' likelihood to transact with a firm (Cases et al 2010;Eastlick et al 2006), but meeting consumer privacy expectations also increases trust in a firm (McCole et al 2010), while violating privacy expectations leads to adverse consumer reactions (Miyazaki 2009). Importantly for business ethicists, privacy violations are experienced as individual harms (Calo 2011) and as unfair acts (Ashworth and Free 2006).…”

Section: Access Viewmentioning

confidence: 99%

Understanding Privacy Online: Development of a Social Contract Approach to Privacy

2015

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Recent scholarship in philosophy, law, and information systems suggests that respecting privacy entails understanding the implicit privacy norms about what, why, and to whom information is shared within specific relationships. These social contracts are important to understand if firms are to adequately manage the privacy expectations of stakeholders. This paper explores a social contract approach to developing, acknowledging, and protecting privacy norms within specific contexts. While privacy as a social contract-a mutually beneficial agreement within a community about sharing and using information-has been introduced theoretically and empirically, the full impact on firms of an alternative framework to respecting the privacy expectations of stakeholders has not been examined. The goal of this paper is to examine how privacy norms develop through social contract's narrative, to redescribe privacy violations given the social contract approach, and to critically examine the role of business as a contractor in developing privacy norms. A social contract narrative dealing specifically with issues of privacy is an important next step in exploring a social contract approach to privacy. Here, the narrative is used to explain to analyze the dynamic process of privacy norm generation within particular communities. Based on this narrative, individuals within a given community discriminately share information with a particular set of obligations in mind as to who has access to the information and how it will be used. Rather than giving away privacy, individuals discriminately share information within a particular community and with norms governing the use of their information. Similar to contractual business ethics' impact on global commerce in explaining how and why norms vary across global contexts, the social contract approach to privacy explains how and why norms vary across communities of actors. Focusing on agreements around privacy expectations shifts the responsibility of firms from adequate notification to the responsibility of firms as contractors to maintain a mutually beneficial and sustainable solution.

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Section: Access Viewmentioning

confidence: 99%

Understanding Privacy Online: Development of a Social Contract Approach to Privacy

2015

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“…Dagegen scheint die Erfahrung mit Versicherungsprodukten, d.h. die Anzahl bestehender Versicherungsverträge, die generelle Einstellung von Versicherungsnehmern gegenüber Versicherungsunternehmen positiv zu beeinflussen, so dass die Akzeptanz betrügerischer Handlungen sinkt (Tennyson 2002). Ebenso wirken Selbstbehalte und deren Höhe negativ auf die wahrgenommene Fairness von Versicherungsnehmern und fördern folglich die Schadenübertreibung (Tennyson 2002 sowie Miyazaki 2008). Dionne und Gagné (2001) finden in der kanadischen Kfz-Versicherung empirische Belege für die negative Wirkung von Selbstbehalten.…”

Section: Introductionunclassified

Einflussfaktoren für betrügerisches Verhalten von Versicherungsnehmern: erste experimentelle Befunde

Lammers

Schiller

2010

ZVersWiss

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Zusammenfassung Vertragstheoretische Ansätze zur Bekämpfung von Versicherungsbetrug basieren grundlegend auf der Annahme, dass Entscheider ausschließlich eigennützig handeln und den Erwartungsnutzen ihrer monetären Auszahlungen maximieren. Folglich wird nicht berücksichtigt, dass Versicherungsbetrug ein kriminelles Verhalten darstellt und daher für einige Individuen z.B. aus moralischen Gründen nicht in Betracht kommt. Im Rahmen dieser Arbeit werden experimentelle Befunde zu Einflussfaktoren für betrügerisches Verhalten von Gelegenheitstätern untersucht. Die Ergebnisse zeigen, dass ein nicht geringer Teil der Experimentteilnehmer Betrugshandlungen grundsätzlich nicht durchführt, obwohl es für sie aus rein monetärer Sicht vorteilhaft wäre. Selbstbehaltsverträge führen zu einer Zunahme betrügerischer Schadenmeldungen. Dagegen haben Informationen über das Schadenmeldeverhalten anderer Individuen einen eher unbedeutenden Einfluss auf das Betrugsverhalten der Teilnehmer, so dass die soziale Interaktion im Experiment nur zu geringen Verhaltensänderungen führt.Abstract Theoretical research examining how to fight insurance fraud is usually based on the assumption that individuals behave purely selfish and maximize exErweiterte schriftliche Fassung eines Vortrags am 11. März 2010 auf der Jahrestagung des Deutschen Vereins für Versicherungswissenschaft in Düsseldorf. Die Autoren danken dem Deutschen Verein für Versicherungswissenschaft für die finanzielle Förderung im Rahmen des Forschungsprojektes "Betrugsbekämpfung in Versicherungsmärkten unter Berücksichtigung sozialer Präferenzen: Theorie und experimentelle Befunde." 650 F. Lammers, J. Schiller pected utility from monetary payoffs. Therefore, this research does not take into account that insurance fraud constitutes an illegal behavior that some individuals never commit, e.g., due to ethical reasons. This article presents experimental findings on factors that influence fraudulent behavior of infrequent offenders. The results show that some subjects never commit fraud in the experiment, although it would have been financially profitable. Deductible contracts lead to an increase of fraudulent behavior. In contrast, information regarding other subjects' claiming behavior does not have any significant impact on the probability to commit fraud. Therefore, in our experiment social interaction only induces minor changes in behavior.

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“…Dionne and Gagné (2001) show that simple deductible contracts may create additional incentives for filing fraudulent claims. In addition, a survey by Miyazaki (2009) With respect to Proposition 1 and Prediction 2, one could expect that differences between the two fraud probabilities should also be significant in the Deductible Treatment.…”

Section: Deductible Treatmentmentioning

confidence: 99%

“…Tennyson (2002) and Miyazaki (2009) find that the deductible size negatively influences perceptions of the ethicality and fairness of the insurance arrangement and therefore increases the acceptability of claim build-up. In this respect, Dionne and Gagné (2001) estimate that, in the Canadian auto insurance industry, a deductible increase from $250 to $500 increases the average claim by 14.6%-31.8% (from $628 to $812).…”

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confidence: 99%

Contract design and insurance fraud: an experimental investigation

Bieberstein¹,

Schiller

2017

Rev Manag Sci

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This paper investigates the impact of insurance contract design on the behavior of filing fraudulent claims in an experimental setup. We test how fraud behavior varies for insurance contracts with full coverage, a straight deductible or variable premiums (bonus-malus contract). In our experiment, filing fraudulent claims is a dominant strategy for selfish participants, with no psychological costs of committing fraud. While some people always commit fraud, a substantial share of people only occasionally or never defraud. In addition, we find that deductible contracts may be perceived as unfair and thus increase the extent of claim build-up compared to full coverage contracts. In contrast, bonus-malus contracts with variable insurance premiums significantly reduce the filing of fictitious claims compared to both full coverage and deductible contracts. This reduction cannot be explained by monetary incentives. Our results indicate that contract design significantly affects psychological costs and, consequently, the extent of fraudulent behavior of policyholders.July 2010 JEL Classification: G22, C91, D03

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Perceived Ethicality of Insurance Claim Fraud: Do Higher Deductibles Lead to Lower Ethical Standards?

Abstract: insurance fraud, insurance claim padding, consumer ethics scale, perceived risk, deviant consumer behavior,

Cited by 49 publications

References 20 publications

Understanding Privacy Online: Development of a Social Contract Approach to Privacy

Understanding Privacy Online: Development of a Social Contract Approach to Privacy

Einflussfaktoren für betrügerisches Verhalten von Versicherungsnehmern: erste experimentelle Befunde

Contract design and insurance fraud: an experimental investigation

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