Far out Friday: Lies, damned lies and insurance claims

Far out Friday: Lies, damned lies and insurance claims | Insurance Business

Far out Friday: Lies, damned lies and insurance claims

Getting clients to tell the truth when claiming on their insurance often feel like a futile exercise. When confronted with a claim form, many clients suddenly discover a hitherto unsuspected creative side, inventing flights of fantasy worthy of JRR Tolkien or JK Rowling.

However, insurers clearly aren’t fans of the claims equivalent of Frodo taking the One Ring to Mordor, which is why UK market research firm Consumer Intelligence has been carrying out ‘controlled experiments’ on insurance customers (the idea of which gives Insurance Business vivid images of clients with electrodes attached to their heads in a ‘Clockwork Orange’ style).

Its testing has revealed some interesting results. The first may be no surprise to insurance professionals: that clients fib like campaign trail politicians in marginal seats when it comes to filling in claim forms, with levels of dishonesty well above average.

The second finding, however, is quite telling. The firm found that bare-faced lies fell by nearly 10% when one simple change was made: namely, asking clients to be honest before supplying information.

Consumer Intelligence CEO Ian Hughes reckons that this result could be replicated across the board with just one change to the much-maligned claim form. He recommends redesigning forms so people are asked at the start to state their answers will be honest rather than at the end

"Asking consumers to be honest drastically reduces dishonesty,” says Hughes. “The simple and powerful lesson for insurers is that it is a way to reduce fraud and ultimately premiums for customers,”

He also commented that insurers could also help themselves by not asking claimants questions that force them to be creative, such as requiring the exact value or measurement of a lost item.

“If people don't know they have to guess and once they start guessing it is hard to stop.”