Fraudulent claim discovered every five minutes, says ABI

Nearly 300 fraudulent claims and just over 2,000 dishonest applications are being detected every day, according to the ABI’s annual insurance fraud figures out today.

The institute found that 107,000 fraudulent insurance claims worth £1.2bn were uncovered by insurers in 2019, up 5% against 2018. 

This equates to a new scam uncovered every five minutes, or 300 a day, with the rise largely driven by increases in motor and property scams.

While the volume increased, there was a 2% decrease in the value of detected claims fraud to £1.2bn, equivalent to £ 3.3m uncovered every day. 

This resulted in a decrease in the average value of a fraudulent claim to £11,400, compared to £12,200 in 2018. 

Motor insurance frauds remained the most common, up 6% in number to 58,000 against 2018, though their value, at £605m, fell slightly.  

Around 75% of fraudulent motor claims contained a personal injury element, potentially reflecting some fraudulent activity ahead of the introduction of personal injury reforms in April next year.

Property frauds showed a “significant” increase, rising by 30% to 27,000 dishonest claims worth £124m.

In addition, the number of liability frauds fell by 14% to 19,000, reflecting insurers “clamping down” on ‘trip and slip’ and noise induced hearing loss claims, as well as measures implemented by the travel sector and government to reduce dishonest gastric illness holiday claims.

Mark Allen, ABI’s manager, fraud and financial crime, said: “The industry makes no apology for its relentless pursuit of insurance cheats, to protect genuine customers, who end up footing the bill through their insurance premiums. 

“Insurers will not hesitate to ensure that fraudsters seeking to profit at the misery and expense of others will suffer severe and long-lasting consequences.”

He added: “Insurers know that the Coronavirus crisis has led to financial hardship for some, and with scammers always preying on people’s anxieties, now it is especially important for consumers to be on their guard, for scams like being approached by someone offering cheap motor insurance.” 

Ben Fletcher, director of the Insurance Fraud Bureau, said: “ABI’s latest figures help to draw attention to the clear challenges we are facing in the fight against insurance fraud.

“Insurance fraud is not a victimless crime, because fraudsters who carry out dangerous scams like ‘Crash for Cash’ and who deliberately damage property put lives at risk.” 

He added: “These statistics show the problem remains significant and the sad reality is that the frequency of these scams normally only increases in times of recession and financial hardship.

“By the public reporting evidence of insurance fraud to the IFB’s Cheatline, we are able to work with insurers and the police to take action. We’ll be campaigning in the months ahead to encourage more people to step forward and report insurance fraud.”

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