Chinese Motor Vehicle Insurance Fraud: Economic Theory And Empirical Analysis

From 1980s, we reinstate insurance business, and insurance has a quick development, arrived 30% annual development speed. According to the different actuarial methods, insured objects and management risks, the life insurance and the non-life insurance have been taken apart. There are 40 the non-life insurance companies from the 1980, at that time, there was only one insurance company.Untill now the automobile insurance is the core business of non-life insurance industry, but the statistical analysis makes it clear that there are serious insurance frauds in the automobile insurance in China and abroad. So the paper is to analyze this problem.At first, analyses the situation of automobile insurance fraud in the America, England and Japan. In fact the insurance is associated with the economic level, the law system, the road situation and other factors, but we shall find some useful experience from other developed countries.Chapter two, make understood the reasons of automobile insurance fraud. The game theory, the utility theory of microeconomics, the new institutional economics, the incomplete contract theory have been employed to analyses. There are several types insurance frauds, and there are different reasons to different frauds, such as the soft insurance fraud and the hard fraud, the reasons of them are different. It is so important to set apart the reasons to find out appreciate insurance fraud detection and the measures to solve them.Chapter three, about the automobile insurance fraud detection. Pay more attention to compare the difference of the AAG model, the PRIDIT model, the expert system, the precision tree method and the neural net method. They have diversity requirements of the data, the distribution of variables, the efficient of the misclassification, the result of the estimation function. In Chinese insurance practice, we cannot adopt these models because we don't built up the digital claim system, the information of the insured automobile and the insured.Chapter four, estimation the economic consequence of the automobile insurance fraud in China. From the actuarial aspect, the insurance fraud makes the non-life insurance company to increase the rate to the insured and the all insured. Doing that, the cost of insurance fraud has been transfer to all of applicants. It is unfair. On the other hand, the insurance fraud will influence the solvency, the stability and the consistence of the non-life insurance company. At the last, basis on the above, we shall take some measures to estimate and detect the automobile insurance fraud. The insurance companies, the insurance association and the regulation organization should co-operate to establish the guard system. Meanwhile, it is significant to improve the insurance consciousness.With the spread out of the WTO, many foreign insurance companies have entered into our insurance market, at the same time we began the marketization of automobile insurance rate and the extend of the underwriting prerequisite, all of these will influence the insurance fraud. Just through the analysis of automobile insurance, we should find out the rules and the methods that can be employed to other insurance products. In the future, the risk management of insurance company is critical to our insurance industry. So the research of automobile insurance fraud is just the starting point.