Behavioural economics offers a fascinating possibility for tackling the problem of insurance fraud. Most insurance fraud isn’t carried out by weathered criminals, it’s conducted by ordinary people who exaggerate on their claim forms. Although it might be viewed as a small slice of the total claim amount, this adds up to a major problem for insurers and customers alike, for each year the cost translates into seemingly ever-increasing premiums.
There is a growing evidence-base for the power of context in influencing honesty, so we wanted to explore how these psychological principles could be applied to enhance the effectiveness of customer communications.
Working with market research firm Consumer Intelligence, and equipped with insights from the brilliant Dan Ariely, we began our journey with an initial experiment. What impact would an honesty pledge have on the propensity to cheat online? Check out the results of our first experiment here:
If you are interested in applying these approaches to your own company, drop us a note for more information.