Abstract
This study aims to explore the current trends in fraud prevention in the insurance industry in Russia. Survey responses from 20 experts and professionals of the leading insurance companies in Moscow were collected. More than a half of them are former police officers who work at security or investigation departments. Survey data analysis was employed. According to the experts’ opinion, existing gaps in the legislation and difficulties in cooperation with the police are the main sources of inefficiency of fraud prevention strategies utilised by the Russian insurance companies. The respondents agreed that both insurers and fraudsters actively use new technologies. Fraudulent claims in compulsory third party liability motor insurance remain the most common activity among Russian criminals, although they quickly expand to health and property insurance. Typically, an insurance fraudster is a 34-year-old male with a college/university degree who cooperates with an insurance broker in 42% of cases. Based on this, a set of recommendations aimed at increasing the efficiency of insurance fraud prevention was produced.
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Notes
Open questions were utilised for exploratory purposes, e.g., to identify what was perceived as the main trends in insurance fraud. In contrast, closed questions were employed to extract particular information, where the number of choices had been pre-determined by the nature of the phenomenon, e.g., gender.
For cases in which the loss was prevented.
Before the victim applies to the insurance company, ‘shadow’ lawyers, or so called auto lawyers, repurchase the right to claim for a smaller amount than the victim could have obtained from the insurer him- or herself (cession or simple power of attorney is used in these cases). Auto lawyers apply all sorts of tricks to “cheat” the amount of the payment, including by increasing the overhead costs of the insurer. Auto lawyers bring the cases to court for an even greater increase in payments (fines, penalties, excessive costs for a representative in court, etc.). These attorneys attract clients by promising to get higher compensation from the insurance companies.
Original survey questionnaire in Russian is available upon request.
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We are thankful to the Insurance Conference Club (Moscow, Russia), which kindly allowed acquiring survey data.
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Appendices
Appendix 1: Survey questionnaire
Joint Study of the National Research University Higher School of Economics and the Insurance Conference ClubFootnote 4
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1.
What do you perceive as the main trends in insurance fraud today?
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2.
Do you feel that the legal/political/social/environment promote strategies to fight insurance fraud? Why or why not?
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3.
Do you feel that insurance fraud is increasing or decreasing in severity and frequency? Why or why not?
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4.
What is your perception of the current barriers to preventing insurance fraud?
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5.
What current strategies are you personally using to fight insurance fraud? Do you feel that they are working? Why or why not?
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6.
What frustrations do you feel as a professional in this field, attempting to fight fraud?
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7.
How would you assess on a 5-point scale the current state of insurance fraud prevention (1—“very inefficient”; 5—“very efficient”)?
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8.
Who is responsible for insurance fraud prevention in Russia now?
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9.
To which category (from the insurance object point of view) does the most recent insurance fraud case investigated by you belong?
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10.
How does one estimate the amount of loss to the insurance company caused by the most recent insurance fraud case investigated by you?
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11.
How many (approximately) perpetrators were involved in the most recent insurance fraud case investigated by you?
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12.
Did collusion take place between the fraudster(s) WITH AT LEAST ONE insurance company employee? (Yes/No/Don’t know).
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13.
Could one state that all perpetrators, involved in the most recent insurance fraud case investigated by you, are employees of EXACTLY THE SAME insurance company, i.e., an internal fraud took place? (Yes/No/Don’t know/Other, clarify).
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14.
Could one state that all perpetrators, involved in the most recent insurance fraud case investigated by you, are employees of DIFFERENT insurance companies?
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15.
What is the principal perpetrator’s gender in the most recent insurance fraud case investigated by you? (Male/Female/Don’t know).
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16.
How old (approximately) is the principal perpetrator in the most recent insurance fraud case investigated by you?
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17.
What is the highest educational level of the principal perpetrator in the most recent insurance fraud case investigated by you?
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18.
What (if known) is the average monthly income of the principal perpetrator in the most recent insurance fraud case investigated by you?
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19.
In which region (country, if not in the Russian Federation) did the most recent insurance fraud case investigated by you take place?
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20.
Which “red flags”, including the ones in the principal fraudster’s behaviour, indicated that fraud had taken place in the most recent case investigated by you?
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21.
What is your gender? (Male/Female).
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22.
What is your age?
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23.
What is the highest educational level you have?
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24.
Degree in which specialty do you have (if you have one)?
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25.
How many full years have you been working in the insurance industry?
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26.
In which department of the insurance company do you work?
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27.
(Optional) What is your current position?
Appendix 2
See Table 9.
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Timofeyev, Y., Busalaeva, T. Current trends in insurance fraud in Russia: evidence from a survey of industry experts. Secur J 34, 1–25 (2021). https://doi.org/10.1057/s41284-019-00209-2
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DOI: https://doi.org/10.1057/s41284-019-00209-2