How Crime Shapes Insurance and Insurance Shapes Crime
Journal of Legal Analysis, Vol.15, p.183, 2023
18 Pages Posted: 16 Mar 2023 Last revised: 8 Sep 2023
Date Written: March 10, 2023
Crime creates demand for insurance but supplying insurance may promote crime. We examine five case studies of insured crimes (auto theft, art theft, kidnap and hijack for ransom, ransomware, and payment card fraud) and find a co-evolutionary process through which insurers engage with insureds, governments, and legal and extralegal third parties to mitigate losses, particularly when criminal innovations destabilize the insurance market. “Insurance as crime governance” stimulates demand for security, shapes criminal incentives, engages with the state to combat crime, and tolerates some crime in the interest of profitability.
Keywords: Insurance against crime, governance, risk assessment & management, crime prevention, security, technology, behavioral economics, theft, kidnap & hijack for ransom, fraud, ransomware
JEL Classification: G22, K14, K42
Suggested Citation: Suggested Citation