In which one of the following ways does insurance fraud NOT affect businesses?

Insurance fraud does not increase profit margins for businesses. In fact, the opposite is often true. When insurance fraud occurs, it typically leads to significant financial losses for insurance companies, which can then raise premiums to compensate for these losses. As a result, businesses face higher insurance costs, which can negatively impact their profit margins.

Additionally, the presence of insurance fraud contributes to increased operational costs due to the need for additional resources dedicated to investigating fraudulent claims, implementing fraud prevention strategies, and managing higher insurance premiums. Furthermore, it can also lead to reduced consumer trust, as customers may be more hesitant to engage with businesses perceived to be affected by fraudulent activities. Thus, the statement that insurance fraud increases profit margins does not reflect the reality of its impact on businesses.