The researchers tried to understand what drives people to falsify information on their insurance claims and they came up with an answer that clarity and transparency on the part of the insurer can make huge savings to both the insurance firm and the consumer.
The study looked at the rejection of a person's efforts and how it affected their emotions and subsequent behaviour.
Using an online platform, participants submitted mock insurance claims and reported on their levels of happiness, sadness, frustration, anxiety and guilt.
People whose claims were rejected reported more negative emotions. They were also more likely to cheat or lie in the next phase of the study, regardless of whether the rejection was made on objective or subjective grounds, or whether or not there was a financial incentive, suggested the study.
âIf we want to understand when people tend to behave dishonestly and commit fraud, we can construct the environment in a way that people are encouraged to behave honestly rather than deceptively,â said Sophie Van Der Zee, Researcher, University of Cambridge.
According to the study published in the journal, Frontiers in Psychology, one might not be a professional criminal, however, when an insurance company rejects a claim, people are more likely to inflate the claims.
For the study, the researchers used a mock insurance claim scenario where people whose claims were initially rejected were quick to fudge their stories to get their claims settled.
"Fraud is a widespread issue that is costing society and thereby each individual large sums of money. The problem with fraud is that it benefits a few people, but as a result it harms rest of the population," added Van Der Zee.
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