The Impact of Insurance Fraud Detection Systems
AbstractThis article analyzes the impact of detection systems in an insurance fraud context. In a noncommitment Costly State Verification setting insurers can only detect fraudulent claims by performing costly audits, and policyholders are overcompensated by the optimal insurance contract. We show that auditing becomes more effective and overcompensation can be reduced, when insurers are able to condition their audits on the information provided by detection systems. Copyright The Journal of Risk and Insurance, 2006.
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Bibliographic InfoArticle provided by The American Risk and Insurance Association in its journal Journal of Risk & Insurance.
Volume (Year): 73 (2006)
Issue (Month): 3 ()
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