Loss Risk Through Fraud in Car Insurance

XREAP No. 2011-07

27 Pages Posted: 3 Jun 2011 Last revised: 7 Jun 2011

See all articles by Mercedes Ayuso

Mercedes Ayuso

University of Barcelona

Catalina Bolancé

University of Barcelona - Department of Econometrics

Montserrat Guillen

Date Written: April 1, 2011

Abstract

Our objective is to analyse fraud as an operational risk for the insurance company. We study the effect of a fraud detection policy on the insurer's results account, quantifying the loss risk from the perspective of claims auditing. From the point of view of operational risk, the study aims to analyse the effect of failing to detect fraudulent claims after investigation. We have chosen VAR as the risk measure with a non-parametric estimation of the loss risk involved in the detection or non-detection of fraudulent claims. The most relevant conclusion is that auditing claims reduces loss risk in the insurance company.

Keywords: fraudulent claims, operational risk, claims auditing, risk measure, non-parametric estimation

Suggested Citation

Ayuso, Mercedes and Bolancé, Catalina and Guillen, Montserrat, Loss Risk Through Fraud in Car Insurance (April 1, 2011). XREAP No. 2011-07, Available at SSRN: https://ssrn.com/abstract=1857007 or http://dx.doi.org/10.2139/ssrn.1857007

Mercedes Ayuso (Contact Author)

University of Barcelona ( email )

Av. Diagonal 690
Barcelona, E-08034
Spain
+34 934 021409 (Phone)
+34 934 021 821 (Fax)

Catalina Bolancé

University of Barcelona - Department of Econometrics ( email )

Av. Diagonal 690
Barcelona, E-08034
Spain

No contact information is available for Montserrat Guillen

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
229
Abstract Views
1,770
Rank
242,250
PlumX Metrics