The Private Policing of Insurance Claims: Power, Profit and Private Justice

Abstract

The article examines the ways private policing is organized with regard to profitability. While the literature on private policing has enhanced our understanding of its growth, scope and normative implications, less is known about how ‘hybrid’ policing is conducted to make profit. Informed by 38 qualitative interviews with the seven largest insurance companies in Sweden, the article details how power relations are organized to ensure that the private policing of insurance claims supports and does not pose a threat to profit. Drawing on evidence from the empirical research, a range of issues are discussed, including the relationship between private policing and state power, and the intertwined governance of both claimants and policing actors.

The limits of the decentred state: the case of policing insurance claims fraud

“…Indeed, both special investigators and police officers clearly exercise repressive power when they decide to exercise control, to invoke the law, to thwart certain behaviours and to seek to ensure compliance (Ericson, Doyle and Barry ; Ericson and Doyle ; Stenström ). In this sense, their actions are essentially negative and refer to a criterion external to the subjects (i.e.…”

“…As Ericson, Doyle and Barry (: 89) observe:

Insurance offenders are punished in ways parallel to punishment in the criminal justice system. The policyholders may have their premiums increased (a fine); they may be asked to participate in loss recovery (restitution); they may be subject to more stringent insurance contract provisions (conditional sentences); they may be required to purchase additional insurance warranties (bonds); and, they may have their insurance withdrawn altogether (banishment).

In addition, research shows that such repressive interventions are directed at those subjects who fail to exhibit prudence and who pose a risk to the profitability of the insurance company (Ericson and Doyle ; Stenström ). However, to understand how these interventions are imposed upon subjects, justified and translated into action, it is also critical to recognize their relation to the productive side of power, or the forces that special investigators and police officers are themselves exposed to.…”

“…There is also a connection between these norms. The image of the ‘normal’ employee (not over‐controlling, managing claims quickly and generating customer satisfaction) is clearly linked to the production and identification of the normal, that is, prudent and profitable policyholder who does not pose a threat to the life of the insured population (Stenström ).…”

“…Simon ; Ewald ; Baker ; Ericson, Doyle and Barry ). Indeed, actuarialism makes it possible for insurers to construct risks and thus turn uncertainty into profit, and it is also pivotal to the selection and the subsequent investigation and punishment of risky (unprofitable) claimants (Ericson, Doyle and Barry ; Stenström ). The current article, however, contributes knowledge on the operations and organization of the complementary regulatory technologies that are used to determine the truth about a loss, the choice of subsequent interventions and the punishment of claimants.…”