Exploring Insurance Fraud and Tourists’ Misbehaviour

Abstract

Fraud affects every type of insurance, whether it is life or non-life insurance. According to Insurance Europe publications, insurance fraud includes providing untruthful or incomplete information in applications for insurance compensation, submitting a claim for a loss based on misleading or untruthful circumstances, including exaggerating a genuine claim; and otherwise being misleading or untruthful in dealings with an insurer, with the intention of gaining a benefit under the insurance contract. Insurance fraud may be committed by the policyholder or by a third party claiming against an insurance policy. It can range from opportunistic claims, through claims for phantom passengers and fictitious injuries in road accidents, to highly organized crime rings. Fraudulent claims and the cost of investigating suspected frauds lead to higher premiums for honest customers. Investigating fraud also has an impact on insurers’ ability to deal with genuine claims quickly. Some resorts in Greece, such as Faliraki and Kavos, have developed a reputation as been places where tourists, mostly British, are often raped from drunken tourists or even from locals. Someone could claim that those are destinations where alcohol and violence can have very negative effects. However, there is also the case of insurance fraud. This research is going to take a deep look not only on the existing theory on insurance fraud, but also on cases which have been on media. Indeed, there is a series of cases where tourists have made claims for been rapped? However, the investigation made from the insurance firms has concluded that no rape has occurred; in most cases the tourists just aimed at the refund given from the insurance company for the case of a rape. Our literature review and secondary research, suggests that there are indeed many cases of this kind of fraud. However, during the past years the insurance firms are on alert and able to reveal many cases of insurance fraud; which has in turn also reduced the cases of persons asking claims from the insurance firms for rapes. Actually, the dramatic fall on the claims from tourists, who claim that they have been raped, is an indication that the increased level of inspections made from the insurance companies have been effective against fraudulent insurance claims.