Briefing: Designing out the opportunities that ghost brokers exploit

Ghost broking has long been a problem for motor insurers, with criminals continuing to find new ways to exploit consumers and insurers. Social media and digital channels have extended these criminals’ reach and made scams harder for consumers to recognise.

Industry figures illustrate the growing challenge. The Insurance Fraud Bureau (IFB) received reports of 596 suspected organised networks in the year to September 2026 and the Insurance Fraud Enforcement Department (Ifed) also opened 131 criminal investigations over that 12-month period – more than in any previous year.

Harm extends beyond insurers, with victims of this scam potentially discovering that they are driving uninsured, exposing them to vehicle seizure, penalties and potentially substantial costs following an accident.

Consumers’ personal information may also be exposed to further misuse.

All of this just goes to show why it is vital to recognise the industry’s existing response. Insurers, the IFB and Ifed have strengthened detection, intelligence sharing, investigation and disruption.

Consumer education also has momentum. IFB’s See Through the Scam campaign uses targeted and multilingual messaging, while leading individual firms have contributed through awareness campaigns, increased website takedowns and other prevention initiatives.

Work still to do

Despite this progress, however, there remain wider questions for insurers.

The policy purchase journey, across direct and intermediated channels and from quotation through inception to post-sale validation, has been designed by the industry.

Ghost brokers have learnt how to exploit it, including opportunities arising from the way insurers compete for business, collect information and decide when to validate it.

While some ghost brokers do fabricate policies entirely outside insurer systems, others exploit the processes used to issue and manage genuine cover.

Insurers determine their underwriting footprint, distribution channels, customer journey, the data used for validation and points of intervention.

Pricing and underwriting teams focus on quotability, competitiveness and conversion, while fraud teams seek to limit exposure and post-sale teams manage applications requiring further checks.

And while these decisions are made for sound commercial reasons, they can also provide opportunities for ghost brokers.

Consider, for example, the consequences of issuing a policy before key information has been robustly validated. A ghost broker may obtain apparently legitimate cover and pass evidence to the consumer before the insurer identifies inconsistencies.

By the time the policy is challenged or cancelled, the ghost broker has likely profited, the consumer may be driving in the belief they are insured, while the insurer faces additional operational costs and claims exposure.

There are opportunities to invest in multiple data sources, technologies and dynamic validation journeys to identify risk and intervene in suspicious activity before cover is issued.

But making the most of these opportunities requires a broader enterprise approach that recognises how competing business objectives can work against effective prevention.

Consumer focus

We must also consider consumer trust, particularly affordability and perceived fairness. Cressey’s fraud triangle recognises pressure, opportunity and rationalisation as influences on fraudulent behaviour.

Although developed to explain the actions of perpetrators, it helps us consider why some consumers might knowingly accept questionable arrangements or misrepresent information to obtain cheaper insurance. Financial pressure, coupled with a belief that insurance is unfairly priced, can make such decisions easier to rationalise.

Genuinely deceived customers simply want affordable, legitimate insurance and financial pressure may make that cheap offer particularly persuasive.

We should consider whether greater consumer confidence in the fairness and transparency of legitimate insurance would help consumers question offers that seem too good to be true – and accept prices from legitimate brokers and insurers as fair value.

The evolving legal and regulatory environment adds weight to a broader approach to mitigation. Ghost broking is explicitly addressed in the government’s Insurance Fraud Charter, while the government’s 2026 Fraud Strategy emphasises prevention, disruption and victim protection.

The FCA’s proposed financial crime guidance points towards stronger risk management and oversight, while not specifically addressing insurance fraud.

Insurers should therefore keep investing in operational controls and supporting the IFB, Ifed and other partners, while also examining how the business acquisition processes they have created could do more to prevent ghost broking.

Preventing ghost broking is part of protecting consumers and the integrity of the insurance market, even where the benefits cannot be attributed to an individual insurer’s financial performance.

Perhaps there is a case for recognising ghost broking prevention more explicitly within insurers’ ESG and wider corporate responsibilities, encouraging investment in reducing harm even where the commercial return is difficult.

Improving consumer trust and protecting the wider market are consistent with the direction of public policy and regulatory expectations – and provide a strong case for continued collective investment.