Modelling different types of automobile insurance fraud behaviour in the Spanish market

From a microeconomic point of view, the control of insurance fraud requires a detailed knowledge of the insureds' behaviour. In this paper, we present discrete-choice models for fraud behaviour and we estimate the influence o f the insured and claim characteristics on the probability of committing fr aud. Data correspond to a Spanish sample. Correction for choice-based sampl ing is introduced in the estimation due to the oversampling of fraud claims . The structure of the Spanish automobile insurance market is also discusse d. Our results differ according to the type of fraud behaviour that is unde r consideration. (C) 1999 Elsevier Science B.V. All rights reserved.