Baker & Shortland on Crime and Insurance

Tom Baker and Anja Shortland (University of Pennsylvania Carey Law School and King's College, London) have posted How Crime Shapes Insurance and Insurance Shapes Crime (Journal of Legal Analysis, Forthcoming) on SSRN. Here is the abstract:

 

Crime creates demand for insurance but supplying insurance may promote crime. We examine five case studies of insured crimes (auto theft, art theft, kidnap and hijack for ransom, ransomware, and payment card fraud) and find a co-evolutionary process through which insurers engage with insureds, governments, and legal and extralegal third parties to mitigate losses, particularly when criminal innovations destabilize the insurance market. “Insurance as crime governance” stimulates demand for security, shapes criminal incentives, engages with the state to combat crime, and tolerates some crime in the interest of profitability.