Nudging Towards Honesty Experimental Evidence from Achmea’s Occupational Disability Insurance

Abstract

This study aimed to decrease fraud in Achmea’s Occupational Disability Insurance. An email was modified into four conditions: a Deterrence nudge, a Reducing Anonymity nudge, a control email as well as no email. This email was sent to clients of Achmea with an Occupational Disability insurance and an employee who was incapacitated to work. Two measures of honest claiming behavior were recorded: the response rate and the ∆Incapacitation Percentage. This is the change in the client’s employee’s incapacitation to work (which usually starts at 100% and decreases to 0%). Achmea funds wages for the part the employee cannot work. It may thus be tempting for the client to report a higher incapacitation percentage than the real situation. The response rate in the two nudge conditions is on average 8.75% higher than in the control email condition. (Wald test; χ2 = 5.6; n = 386; p = .02). The nudges do not affect the ∆Incapacitation Percentage. However, the covariate ‘Incapacitation Percentage at Mail’ suggests that if people respond to the email, they do so honestly: clients report larger changes of ∆Incapacitation Percentage if the previous percentage was high. Clients thus catch up with what the percentage should be. Therefore, as the two nudge conditions yield more responses, total honest claiming behavior increases in these conditions. Using these nudges thus leads to less fraud.