I agree this seems like fraud, but why can't it both remove an inefficiency and be duplicitous? From the standpoint of the insurance company's financials this isn't any different from coordinating with 20+ individuals to execute the same scheme. If the latter removes an inefficiency it should follow that this woman did the same.
But it largely doesn’t matter from the pricing point of view. If fraud becomes a big enough risk it will get priced in.
That doesn’t mean it’s legal though. Car insurance is very efficient at dealing with fraudulent claims. Some get paid out some get prosecuted and every thing in between.
But there is a basic agreement that some law is going to be respected otherwise it’s just who has the biggest army. In my personal opinion using assumed names puts you over the line.
Yep, I'm totally with you that using assumed names puts you over the line. In my corner of the world she would probably have been fine legally in that regard with a bunch of shell corporations, but it still seems shady.
> If fraud becomes a big enough risk it will get priced in. Identity fraud aside, the claims themselves aren't necessarily fraudulent though (my rationale: https://news.ycombinator.com/item?id=23529963). Whether they're fraudulent or not, a single malicious actor likely pales in comparison to the large number of people legitimately purchasing insurance for these kinds of flights. That risk _is_ already priced in, and low-risk flights necessarily have higher fees than they need in order to offset these kinds of losses (no matter whether they stem from poor models, fixed pricing, or something else).
Virtually all financial instruments are used this way. Insurance is about buying/selling a particular form of risk just like any other financial instrument. The reason we treat it as one isn’t just because it can be modeled that way.
That said this seems like fraud. Using assumed names isn’t removing an efficiency in the market it’s being duplicitous.