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Using behavioural science to reduce opportunistic insurance fraud

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Undetected, opportunistic fraud in the form of dishonest or exaggerated information in applications, renewal or claims processes is estimated to cost the UK insurance industry up to £1bn per year. This paper reports on research commissioned by the Insurance Fraud Bureau, in which two online randomised controlled trial experiments were run to test ways of tackling this problem. Both of the experiments involved the application of behavioural science to create short consumer-facing messages, one in an above-the-line advertising context, and the other in an online insurance claims or application context. Results showed the majority of messages to work better than controls for both experiments, improving perceptions and changing behaviour. The results have enormous implications for the insurance industry, and learnings for marketing and insights professionals more broadly. For the former, correct application of these experiments’ findings could improve industry perceptions, and significantly improve revenues by avoiding falsified applications and inflated claims. Expertise is needed to ensure the findings are applied in the right way across an insurer’s potentially multi-channel application and claims processes. For the latter, the study demonstrates the importance of context in the use of behavioural science and the need for the appropriate testing of customer communications.
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Keywords: above-the-line communications; behavioural science; interventions; nudges; operational communications; opportunistic fraud; randomised controlled trials

Document Type: Research Article

Affiliations: 1: Principal at Decision Technology 2: Director at Decision Technology

Publication date: January 1, 2020

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  • Applied Marketing Analytics is the major new professional journal publishing in-depth, peer-reviewed articles on all aspects of marketing analytics. Guided by an expert Editorial Board each quarterly 100-page issue - published both in print and online - features detailed, practical articles written by and for marketing analytics professionals on innovative thinking, strategies, techniques, software and applied research showing how major brands are collecting, interpreting and acting on marketing analytics, both around the world and across varied digital and non-digital marketing channels. Learn how to measure the effectiveness of your marketing initiatives more accurately, how this compares to your competitors, identify gaps in your marketing analytics program and what metrics that support sound marketing decision making - and add to the bottom line.
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