Younger Generations Appear More Tolerant of Fraud and ‘Envious’ of Those Who Commit It
A new study by Verisk and the Coalition Against Insurance Fraud has found that younger Americans are more tolerant of insurance fraud, even feeling envious of those who commit it. The study, which surveyed more than 1,500 insurance consumers, found that only 75% of those under age 45 consider insurance fraud a crime, compared to 87-96% of older respondents.
“This study should sound the alarm for insurers, consumer activists, regulators, and legislators on the state of fraud in America. While it’s marginally reassuring that 84% of Americans in the survey consider insurance fraud a crime, the 16% that do not consider it a crime potentially represent more than 53 million Americans,” said Matthew Smith, executive director of the Coalition Against Insurance Fraud. “There is a need for consumer education on the harm insurance fraud crimes have on our economy and on every American citizen and family.”
The study also found that younger Americans are more likely to commit insurance fraud themselves. More than 30% of 25-34-year-olds said they would “definitely” submit a fraudulent property damage claim, compared to only 10% of those 45 and older. 27% of those 18-24 years old also would be willing to commit workers’ compensation fraud, as compared to less than 7% of those over 45.
“The results prove the continued need for insurers to be hypervigilant about the impact of fraud on their book of business,” said Maroun Mourad, president of Verisk Claims Solutions. “The fact that younger generations are more tolerant and motivated to commit claims fraud indicates that this problem is not going away and is likely to persist in the future. Carriers would be wise to set up a strong perimeter defense to ensure they are adequately and accurately detecting potential fraud throughout the policy life cycle.”
These findings suggest that there is a need for more consumer education and awareness on the harm and consequences of insurance fraud, as well as more effective detection and prevention strategies by insurers, regulators, and law enforcement. The Coalition Against Insurance Fraud estimates that fraudulent claims steal $80 billion annually across all lines of the insurance business. This means that insurance fraud costs the average U.S. family between $400 and $700 per year in the form of increased premiums.
