Società Italiana di Diritto ed Economia, SIDE - ISLE 2015 - 11TH ANNUAL CONFERENCE

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A contribution to the empirics of insurance fraud
Giovanni Millo, Antonio Salera

Last modified: 2015-12-15


We investigate the determinants of the share of insurance frauds over total claims in four different lines of property-liability insurance across 103 Italian provinces and five years. Fraud is framed in terms of rewards and both formal and social costs of crime; either are related to the characteristics of the local socioeconomic system and of the local insurance market. Results are different across lines; fraudulent behaviour in some lines turns out to be more frequent in poorer areas and during weak phases of the economic cycle, or among the younger and less educated, in accordance with the general literature on crime. There is evidence of the negative effect of the density of territorial units (inspectorates and claim handling units of insurers) on fraud frequency. Support is also found for the controlling role of social capital, through social sanctions, on fraudulent behaviour.

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