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A Multi‐Line Insurance Fraud Recognition System: A Government‐Led Approach in Korea

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  • Hunsoo Kim
  • W. Jean Kwon

Abstract

This article introduces a government‐led insurance fraud detection program in Korea. The Insurance Fraud Recognition System (IFRS) uses policy and claims data from multi‐lines of insurance (life, automobile, and fire), employs a three‐stage statistical and link analysis to identify presumably fraudulent claims by claimant or by group, and generates system reports that the government regulator draws on to make decisions. The authors evaluate the system based on the fraud statistics and IFRS results for 2004, and offer recommendations for system improvement. This article examines existing studies about fraud, industry experiments using advanced technology, and government assistance to the insurance industry's fight against fraud in selected countries. It also provides a brief overview of the Korean insurance market, especially after the recent Asian economic crisis.

Suggested Citation

  • Hunsoo Kim & W. Jean Kwon, 2006. "A Multi‐Line Insurance Fraud Recognition System: A Government‐Led Approach in Korea," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 9(2), pages 131-147, September.
    • Handle: RePEc:bla:rmgtin:v:9:y:2006:i:2:p:131-147
    DOI: j.1540-6296.2006.00090.x
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    References listed on IDEAS

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    1. Dionne, G., 1980. "The Effects of Insurance on the Possibilities of Fraud," Cahiers de recherche 8103, Universite de Montreal, Departement de sciences economiques.
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    5. Tennyson, Sharon, 1997. "Economic institutions and individual ethics: A study of consumer attitudes toward insurance fraud," Journal of Economic Behavior & Organization, Elsevier, vol. 32(2), pages 247-265, February.
    6. Kai Sülzle & Achim Wambach, 2005. "Insurance in a Market for Credence Goods," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 72(1), pages 159-176, March.
    7. M. Martin Boyer, 2000. "Centralizing Insurance Fraud Investigation*," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 25(2), pages 159-178, December.
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    Cited by:

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    2. William Lesch & Johannes Brinkmann, 2011. "Consumer Insurance Fraud/Abuse as Co-creation and Co-responsibility: A New Paradigm," Journal of Business Ethics, Springer, vol. 103(1), pages 17-32, April.

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