Insurers Face Higher Risk of Fraud from Younger Generations

According to recent research, younger people are more likely to consider engaging in insurance fraud compared to older generations. This finding is consistent with other age-related patterns in fraudulent behavior.

Youth and Insurance Fraud

The University of Georgia’s researchers surveyed respondents on their willingness to commit actions such as inflating damages from a previous incident in a new car accident claim or providing false information on an insurance application. Among those between 25 and 34 years old, two out of five respondents indicated they would be comfortable with these actions, often justifying them as ways to save money or assist friends.

In contrast, only about 5% of individuals aged 55 and older expressed approval for such behavior. The study suggested that older adults tend to possess a stronger moral framework, with attitudes toward fraud largely shaped by ethical considerations.

Negative Feelings Toward Insurers Among Young Adults

Across all age groups, there were negative feelings toward insurance companies. However, younger adults often interacted with insurers in an impersonal manner and viewed fraud as a victimless act.

“Younger adults are more inclined to commit most types of fraud,” said Jennifer Pitt, Senior Analyst of Fraud Management at Javelin Strategy & Research. “They justify their actions by highlighting their dire financial situations and arguing that fraud is harmless because they believe it affects large companies that can easily absorb the losses.

Many younger adults also perceive insurance companies as taking money from hard-working people to benefit themselves, leading them to see no issue in retaliating through fraudulent claims,” Pitt added.

Lack of Understanding Among Younger Adults

The survey revealed that younger adults were unsure where the line between legitimate but questionable claim practices and outright fraud was drawn. Their views shifted only when they anticipated significant consequences or broader harm resulting from their actions.

This was evident in a recent incident involving check fraud against Chase Bank, driven by a viral TikTok post. Many participants rationalized that they were simply taking advantage of a banking “glitch.”

In the past, people made decisions based on moral considerations or risk-reward analysis,” said Pitt. Today’s youth are less likely to weigh these factors when considering whether to commit crimes like fraud.”