The Importance of Consumer Research

For the Pennsylvania Insurance Fraud Prevention Authority (IFPA) — and all other fraud-fighting organizations throughout the country — in order to properly address the complex problem of insurance fraud, it’s vital to understand consumer attitudes and perceptions of it.

Uncovering Key Perspectives

That’s why the nation’s fraud-prevention community applauds the release of “WHO ME?” — Who Commits Insurance Fraud and Why. This landmark research study from Verisk and the Coalition Against Insurance Fraud (CAIF) dives beneath the surface to uncover prevailing mindsets toward insurance fraud.

The survey probes people’s opinions on topics such as whether insurance fraud is a crime and how likely they are to commit it. For example, it revealed that an overall 84% said they do consider insurance fraud to be a crime. However, when breaking down the responses by age, only 65% of the 18-to-24 age group believed it to be so. Many participants believed it is a victimless crime, likely unaware that insurance fraud has an economic impact of $308 billion per year and costs each family about $900.

Learn More

Get the facts for yourself — download the “WHO ME?” study (PDF) — and read what consumers of all ages really think about insurance fraud.

IFPA’s Legacy of Research-Based Strategy

IFPA’s Study #1

When IFPA’s Know the Risks. Know the Penalties. campaign was developed over 15 years ago, findings from consumer research formed its strategic foundation. IFPA engaged the Floyd Institute Center for Opinion Research of Franklin and Marshall College to survey a representative sample of Pennsylvanians to assess four areas:

  1. Current knowledge of the behaviors that constitute insurance fraud
  2. Knowledge of the risks and consequences for committing insurance fraud
  3. Individuals’ likelihood to consider committing insurance fraud
  4. Respondents’ level of interest in learning more about insurance fraud

The most significant findings of the study were:

  1. Knowledge about insurance fraud itself was minimal. Only one in six respondents was knowledgeable about how insurance fraud is classified and defined. Even fewer understand that insurance fraud is a felony, and unfortunately, not many Pennsylvanians were interested in learning more about the topic of insurance fraud.
  2. Many Pennsylvanians did not believe insurance fraud is a serious crime. Only 12% categorized insurance fraud as one of the most serious types of crimes and only 25% said they were likely to report someone who was committing it.
  3. Most Pennsylvania residents — nearly seven in ten — stated strongly they would never consider committing insurance fraud. These respondents said they could “never” be tempted to defraud insurers, no matter what type of scenario they were presented. This is encouraging, but in a state with more than 12 million residents, this percentage suggested that about 2.5 million1 might consider committing the crime.

Using Research to Monitor Progress

The underlying foundation of our fraud prevention strategy is that the more consumers know about the seriousness of insurance fraud and its consequences, the less likely they are to commit it. So, what did Pennsylvanians learn from the campaign?

Sixteen months after the campaign’s launch, the Floyd Institute Center for Opinion Research of Franklin and Marshall College again surveyed a representative sample of Pennsylvanians in order to assess if and/or how their attitudes about insurance fraud had changed since the previous study was conducted.

The second study, which surveyed 1,000 Pennsylvanian adults, found that more were beginning to understand the seriousness of the crime, and that Pennsylvania is indeed, to quote the campaign’s commercials, “cracking down” on insurance fraud:

  • The number of consumers who “strongly agree” that insurance fraud is classified with the most serious types of crime increased by 33%.
  • The number of consumers reporting an accurate understanding of how insurance fraud is classified (a felony) and defined (a lie told to unlawfully gain benefits from an insurance company) increased by 18%.
  • Consumer awareness that insurance companies are using sophisticated technology to detect insurance fraud increased by 19%.2

Yet another follow-up study conducted in 2010 showed that Pennsylvanians’ understanding of insurance fraud and its consequences have continued to increase since the launch of a statewide awareness campaign. More Pennsylvanians know what insurance fraud is, the seriousness of the crime, and that there are risks and consequences.

The statewide study, conducted by the Floyd Institute Center for Opinion Research of Franklin and Marshall College, surveyed 1,000 Pennsylvania adults to ascertain attitudes and awareness about insurance fraud. The study found that the number of consumers who “strongly agree” that insurance fraud is classified with the most serious types of crime has increased by 58% since the initial baseline study. The study also found that the number of consumers reporting an accurate understanding of how insurance fraud is classified (a felony) and defined (a lie told to unlawfully gain benefits from an insurance company) had increased by 41%. Consumer belief that offenders will get caught had increased by 160%.3

The consistent methodology of these three independently conducted studies has helped the program reliably track a consistent growth in consumer awareness that our initial research uncovered as essential to prevention.

Follow-up Research to Assess Progress

Additional market research conducted on behalf of the prevention campaign confirmed a correlation between the level of advertising promotion and consumer awareness of key insurance fraud prevention messages.

During October and November 2017, the Floyd Institute Center for Opinion Research of Franklin and Marshall College conducted an additional follow-up study to measure awareness and attitudes about insurance fraud among Pennsylvanians. Researchers again surveyed a sampling of 1,000 Pennsylvania adults on such key areas as knowledge of how insurance fraud is classified and defined, and their belief in the likelihood of getting caught for committing insurance fraud.

The study found that overall consumer awareness levels were fairly consistent with the previous follow-up study. However, researchers noted that awareness in the Philadelphia region (48%) was significantly higher than the rest of the state (38%). Researchers attributed this disparity to the significantly higher concentration of advertising resources being expended in the southeast Pennsylvania region. The consistent methodology of the campaign’s independently conducted studies has helped the program track the measurable benefits of paid, targeted marketing on consumer awareness levels, which the baseline research determined essential to prevention.