For insurers, the current economic environment appears to have brought one thing along with it: an increase in the incidence of fraud. This is true particularly in the area of so-called soft fraud, which the Coalition Against Insurance Fraud defines as “small-time cheating by normally honest people”–a phenomenon recently addressed in the Journal of Business Ethics that accounts for up to 30 percent of lost claim revenue each year.

And while there’s no research data to prove the link between the state of the economy and the uptick of insurance fraud, the most recent questionable claims numbers (coming from the National Insurance Crime Bureau and the Insurance Information Institute) comparing the first quarter of 2008 with the same period in 2009 are certainly telling: property hail damage, up 407 percent; commercial slip and fall, up 77 percent; commercial fire and arson, up 76 percent.

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