Research On Behavior Evolution And Payment Strategy Of Insurance Fraud

The insurance market is an asymmetric information market,and the behavior between the insurance parties is a kind of interactive behavior.This article studies the issue of insurance fraud behavior from two distinct perspectives.On the one hand,depending on some established anti-fraud strategy from insurance company,we investigate the evolution processes of fraudulent behavior of policyholders by using the evolutionary game models.On the other hand,with some given conditions for the fraudulent rate of policyholders,we discuss the payment strategies of insurance company for minimizing the compensation losses under the CSF framework.The group of policyholders is the relevant party to the insurance market.Under the premise of moral hazard,there is always an evolution of fraud behavior and fraud information dissemination within the insured group.Considering the fact that the fraud management behavior of insurance companies will be relatively stable for a period of time,this paper studies the evolution process of the insured group under the established conditions of the insurance company's anti-fraud strategy.By this situation,the activities of insurance company based on whether it has a perception of the increase or decrease of the group's fraudulent behavior can affect the evolutionary stability of the insured group.When insurers always maintain a constant anti-fraud policy,the group behavior of the insured will eventually stabilize to a state where all choose to be fraudulent,all choose to be honest or not be stable at a certain fraud rate,and the result depends on the severity of the anti-fraud strategy.On the contrast,when insurance companies adjust anti-fraud strategies based on their perceptions of changes in fraudulent behavior,there appears a situation where the insured group does not evolve stably.The theoretical analysis and numerical simulations show that,in such a case,the fraudulent behavior of the insured group will slightly fluctuate around at some demarcation point.This is a realistic and useful case for insurance company.In addition,some fraud-related factors can influence the direction of evolution.From the management point of view,if the goal is to keep the fraud rate level as low as possible,then the most direct way for insurance company should be designing and adopting the most stringent audit strategies.Moreover,the model analysis also shows that,to minimize the expected benefits of the policyholder fraud,the insurer should try to improve its detection capability and make it more effective,to increase the fraud cost of dishonest policyholders,and to strengthen the punishment for the fraudulent activities.The study of the optimal payment strategy for insurance company is based on some fixed level of the policyholder's fraud rate.It has been noticed that there is often a phenomenon of cautious payment by insurance companies,that is,the amount actually paid by insurance companies is less than the amount that can be paid.This article is based on the CSF framework to study this phenomenon,and at the same time it is linked to the incompatibility between insurance parties' expertise in insurance expertise,that is,insurance companies have obvious professional advantages,so that insurance contracts can be used more effectively in the legal context.Theoretical analysis shows that,under certain conditions,a cautious payment strategy always has value for insurer in handling claims with low claim amount,and it can reduce the losses of insurer from frauds.Second,the application value of cautious payment depends on the identification ability of insurance company to fraudulent claims.The more the insurance company screens more fraud from claims,the more the strategy reduces the losses for insurer from frauds.