As we saw in the previous article, through the Fraud Triangle we can learn the reasons why an individual makes the decision to carry out a fraud, and here we will start with the Motivation Vertex.
Starting from this, we find the vertex of “Motivation” and this represents the motives that make the individual commit fraud.
Sometimes this motivation can also be referred to as “pressure”, haciendo referenreferring to the feeling that something is pushing the insured to behave in a fraudulent manner. Some of these reasons can be:
- Personal Incentive:
The most obvious reason for a person to make a fraudulent claim is their own personal circumstances. An example of this might be something like they feel they should be earning more, and so they take a fraudulent action with their insurance in order to make a profit from it.
- Enjoyment of the Reward:
Some policyholders who commit fraud will simply enjoy the process of getting a little more than they should. They may also like the idea of “cheating the system” and feel compelled to repeat their behavior in future claims to their insurer.
- Claims for low amounts that “do not arouse” the insurer’s suspicions:
We have already mentioned that some fraudsters do not consider what they do to be a crime. This is an incentive explored by psychology professor and economist Dan Ariely in his book ‘The (Honest) Truth About Dishonesty’.
Tras realizar una investigación con 30.000 personas, Ariely afirmó que “Most people cheat to the extent that it allows them to retain an image of themselves as reasonably honest individuals”.
Although your fraudulent claim may be small in amount (or at least not large enough to preserve your good image), each of these small claims adds up to a large amount, resulting in significant losses for insurers.
As we can well intuit it is difficult to control the personal circumstances of any individual. However, as insurance experts we can be more open and transparent about the effects fraud has on the insurance industry.
Let’s remember that fraud also affects other policyholders, including the fraudster himself, let’s not forget. The more fraud occurs, the higher the prices of insurance policies will be.