Moral intensity, moral awareness and ethical predispositions: The case of insurance fraud

The issue of insurance fraud by consumers continues to perplex insurance firms, costing billions of dollars per year in the United States alone. Some analysts report that 10 per cent or more of property/casualty insurance claims are fraudulent, while less than 20 per cent of fraudulent claims being...

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Bibliographic Details
Published inJournal of financial services marketing Vol. 21; no. 1; pp. 4 - 18
Main Authors Ishida, Chiharu, Chang, Woojung, Taylor, Steve
Format Journal Article
LanguageEnglish
Published London Palgrave Macmillan UK 01.03.2016
Palgrave Macmillan
Subjects
Attitudes
Auditing standards
Behavior
Chemists
Consumers
Decision making
Economics and Finance
Ethics
Finance
Financial Services
Hypotheses
Incentives
Insurance claims
Insurance fraud
Insurance industry
Marketing
Morality
Original Article
moral awareness
insurance fraud
moral intensity
moral judgment
moral recognition
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Summary:The issue of insurance fraud by consumers continues to perplex insurance firms, costing billions of dollars per year in the United States alone. Some analysts report that 10 per cent or more of property/casualty insurance claims are fraudulent, while less than 20 per cent of fraudulent claims being detected. Consumer attitudes are becoming more tolerant of insurance fraud in recent years. Recognizing that not all insurance fraud situations are created equal, we investigate variability in perceptions of moral intensity in dissimilar insurance padding situations in a 2 (to help others versus to profit self) × 2 (a small credit union versus a large online insurer) model and compared the results between two independent samples (college students/Millennials and an older adult population). We also investigated the impact of ethical predispositions (formalism and utilitarianism) on moral awareness and moral judgment using these four scenarios. The results suggest that the Millennials may exhibit more situationalism and more lenient judgments of collaborative versus unilateral ethical violations. In particular, ‘for self’ versus ‘for others’ comparisons show striking differences between the two age groups. The results add to the growing literature in explaining intra-personal variability in moral decision making.
ISSN:1363-0539
1479-1846
DOI:10.1057/fsm.2015.26