Property and casualty insurance market: assessment of trends and fraud cases in Latvia vs Europe

Abstract

Property and casualty insurance as an umbrella term encompasses various insurance products that cover the risks of damage caused to the assets and provide the liability insurance. As insurance business is related with money people have always tried to perform illegal activities to earn extra income. Insurance fraud as a type of financial crime has existed since the origination of commercial business. Therefore, insurance fraud, its identification and prevention is one of the most topical and essential problems in the insurance industry. The research aim is to assess property and casualty insurance market trends in line with the insurance fraud. The research mainly applies the monographic descriptive method as well as the methods of analysis and synthesis. Content analysis is used to study case laws and analyse insurance fraud cases. The research results demonstrate that in Latvia, the annual amount of compensations paid by insurance companies due to fraudulent claims may range between EUR 7.55 million (in case of 5% fraud) and EUR 30.10 million (in case of 20% fraud). Yet, 20% of fraudulent cases might basically refer to the recent pandemic years like 2021 and 2022. The most popular and serious insurance fraud cases relate to a car theft, staged accidents, submission of false documents and hidden actual causes of the fire in property insurance. The analysed court cases report fine, forced labour and even imprisonment as penalty measures for the committed insurance fraud.