Measurement of the Severity of Opportunistic Fraud in Injury Insurance: Evidence from China

This article assesses the effects of claimant demographics and other claim characteristics on the measurement of the severity of opportunistic fraud using 96 excess claim lawsuits in personal injury insurance in China in 2000–2012. The empirical result indicates that severe opportunistic fraud that results in death is more numerous than it is for fraud that leads to disability and nondisability, which may be due to the fact that more severe injury may create greater openings for opportunistic fraud. Second, the severity of opportunistic fraud in provincial cities is lower than that in small or midsize cities because the former does not imply greater severity of opportunistic fraud. Third, the severity of opportunistic fraud in injuries from daily activity is greater than that for injuries from work and traffic accidents, implying that a higher excess claim probability and greater severity of opportunistic fraud in injuries from daily activity are consistent.