Insurance fraud estimation : more evidence from the Quebec automobile insurance industry
AbstractThis article follows a previous study on insurance fraud in the Quebec automobile insurance industry (Dionne and Belhadji, 1996). Results from that research showed that 3 to 6,4% of all claim payments (excluding those for "glass damage only") contained fraud, representing 28 to 61 million dollars in 1994-1995. This evaluation was a minimum since it was limited to observed fraud only. In this paper, we apply a statistical method to estimate the total fraud level in the industry for the same period. Our results show a multiplicative factor of 3,4% of fraudulent files found in Dionne and Belhadji, which means that total fraud payments ranged from 96,2 to 208,4 million dollars in 1994-1995. Our Best Guest Estimator roughly a 10% fraud rate or about 113,5 million dollars.
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Bibliographic InfoPaper provided by THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise in its series THEMA Working Papers with number 97-21.
Date of creation: 1997
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Other versions of this item:
- Caron, L. & Dionne, G., 1996. "Insurance Fraud Estimation: More Evidence from the Quebec Automobile Insurance Industry," Ecole des Hautes Etudes Commerciales de Montreal- 96-02, Ecole des Hautes Etudes Commerciales de Montreal-Chaire de gestion des risques..
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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