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Insurer RSA’s staggering error

Category : Business

RSA claims exaggerated expenses claims cost UK £27.7bn last year – but the insurer’s methodology was utter rubbish

Ping! It’s an email from RSA, the large insurer, carrying the revelation that “exaggerated expense claims cost UK businesses a staggering £27.7bn last year”.

It’s utter rubbish, of course. The only staggering aspect is the basic error in RSA’s methodology. Having been told by its pollsters that 53% of workers with expense accounts fiddle their claims by £1,768 on average (a deeply dodgy statistic in itself, one suspects), RSA then assumed the entire working population of 29.2m is able to file expenses. That’s how it got to the rounded figure of £27.7bn – 53% of 29.2m multiplied by £1,768.

But not every employee can claim expenses. Indeed, probably only a small minority can.

RSA later withdrew the £27.7bn figure but even its reworked press release waffled on about “increasingly dishonest employees” raiding the company coffers and having “a major impact” on the UK economy. Stop: you’re an insurance company, you’re supposed to employ actuaries.

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