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

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

In all, approximately 41,600 questionable claims were reportedby insurance companies in the first half of 2009, compared with36,700 in the same period last year, according to the NICB.