ABI launches insurance fraud register

The ABI has launched the insurance fraud register (IFR) today to help cut the cost of insurance scams.

The IFR is a database that will hold details of all known insurance fraudsters. It will be run by the Insurance Fraud Bureau.

The trade body said that insurers were now detecting 2,670 fraudulent insurance claims a week, worth £19m.

The ABI report, No Hiding Place-Insurance Fraud Exposed, stated that in 2011:

• Insurers detected 139,000 bogus or exaggerated insurance claims, up 5% on 2010. The value of savings on these frauds was almost £983m - a rise of 7% on 2010;
• Home insurance frauds were the most common, with 71,000 detected dishonest claims, valued at £106m; and
• Dishonest motor insurance claims were the most expensive, with savings of £541m made from the 45,000 bogus claims uncovered. Fraudulent whiplash claims were the main factor for the rise.

Insurance fraud now adds an average of £50 a year to the insurance bill of every UK policyholder.

ABI director general Otto Thoresen said: “The industry makes no apologies for its zero-tolerance approach to insurance fraud. Honest customers are sick of footing the bill for insurance cheats, through higher insurance premiums. From the highly organised ‘crash for cash’ motor  scams to the opportunistic exaggeration of a genuine claim, insurers are determined to do what it takes to protect honest customers.

“The development of the IFR marks a milestone in the fight against fraud. It reinforces the strong message that insurance cheats can expect difficulties in obtaining future insurance, credit and other financial products, as well as getting a criminal record.”

ABI financial crime committee project sponsor Richard Davies said: “The IFR underlines the industry’s continuing commitment to reducing fraud and protecting honest customers. It complements the work of the Insurance Fraud Bureau in detecting fraud, and the Insurance Fraud Enforcement Department in prosecuting fraudsters.  

“The register will make it easier for insurers to prevent fraud by making details of known fraudsters available to insurers through a secure protocol. It gives the clearest signal yet that we are more determined than ever to clampdown on insurance fraud. Those that defraud insurers and their honest customers face real and tangible consequences for their actions.”