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The land of pasta and fraud?

On a recent visit to Italy, I became immersed into the counter fraud culture of this unique area. During my many hours consuming pasta, pizza, and red wine, I pondered how this country has extremely unique fraud challenges.

Statistics reveal that there is a very high probability that a driver will be involved in an accident in Italy; one vehicle in twelve in Italy is involved in an auto accident as compared to one in twenty-three in France. Italy also tops the scale as having the highest percentage of injuries claimed; over one million people per year claim injuries as compared to under two hundred thousand in France. It is no surprise that as a consequence of these statistics, premiums in Italy are extremely high, much higher than many other neighboring countries, such as France, where premiums are approximately half of the cost. My research revealed that premiums in Italy increased 18 percent between the years 2002 and 2009, with the average European country increasing only 7 percent. As many of my readers are aware, I am a big believer in the justification and entitlement theory to support financial fraud and this theory would fit perfectly in this Italian landscape. Because of these high premiums and high-risk drivers, policyholders will exhibit an increased sense of justification and entitlement, which will push more fraudulent behavior.

Another challenge in Italy is the lack of accurate detection of fraudulent cases. Statistics I located showed that approximately 2 percent of claims are investigated for fraud in Italy, when fraud experts report that the fraud rate should be closer to 10 to 14 percent, indicating a huge gap in lost opportunity.

Stay safe!

Dr. Fraud


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