Typhoons and Opportunistic Fraud: Claim Patterns of Automobile Theft Insurance in Taiwan

22 Pages Posted: 15 Feb 2014

See all articles by Tsung‐I Pao

Tsung‐I Pao

Tamkang University

Larry Y. Tzeng

National Taiwan University - Department of Finance

Kili C. Wang

Tamkang University

Date Written: March 2014

Abstract

We present evidence to support the existence of opportunistic fraud in the automobile theft insurance market in Taiwan. After encountering a typhoon hit, the insured who purchase automobile theft insurance but do not purchase typhoon/flood insurance tend to have a significantly higher probability of filing a total theft claim than other insured. The above relationship exists mainly in places affected by typhoons. Such evidence does not exist in partial theft claim. These claim patterns of automobile theft insurance provide us with strong evidence that supports the existence of opportunistic fraud in the market.

Suggested Citation

Pao, Tsung‐I and Tzeng, Larry and Wang, Kili C., Typhoons and Opportunistic Fraud: Claim Patterns of Automobile Theft Insurance in Taiwan (March 2014). Journal of Risk and Insurance, Vol. 81, Issue 1, pp. 91-112, 2014, Available at SSRN: https://ssrn.com/abstract=2396236 or http://dx.doi.org/10.1111/j.1539-6975.2012.01498.x

Tsung‐I Pao (Contact Author)

Tamkang University

No.151, Yingzhuan Rd
Taiwan, Taipei Hsien 25137
China

Larry Tzeng

National Taiwan University - Department of Finance ( email )

1 Sec. 4, Roosevelt Road
Taipei, 106
Taiwan

Kili C. Wang

Tamkang University ( email )

No.151, Yingzhuan Rd
Taiwan, Taipei Hsien 25137
China

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