Delegates at Insurance Times’s third virtual roundtable say the ‘farming scope for Covid claims is absolutely massive’

Claims farmers have the potential to yield a rich harvest this autumn as the “farming scope for Covid claims is absolutely massive”, heard September’s Fraud Charter meeting – the third virtual roundtable hosted by Insurance Times this year.

Attendees across the board are beginning to see an uptick in claims farming activity, with Paul Holmes, insurance partner at law firm DWF, adding that “claims farmers are moving into Covid claims, as are the union law firms, so they are coming and they are going to be coming, we anticipate, very strongly”.

Part of the reason claims farmers are targeting Covid-19-related claims, according to Holmes, is because of the sheer number of people they can cherry-pick from who may have had the virus.

He explained: “We are anticipating we will see a lot because, if you are a farmer or in fact encouraging an outright fraudulent claim as it is now, you’ve at least got to have somebody who’s pretending to be involved in an accident – there’s a limited scope of people. The farming scope for Covid claims is absolutely massive because, potentially, anyone in the country is a potential customer.”

Holmes predicted that many coronavirus claims could be fraudulent and that it will be difficult for claimants to prove causation.

For Steve Crystal, head of financial crime at Sedgwick, claims farmers “are positioning for the future rather than actively coming in at the moment”.

He added: “We bump into a lot of claims farmers and it’s a tricky one because, to a large extent, it’s a legitimate profession. There’s plenty of genuine reasons for people wanting help with a claim, but I think none of that trumps the need to be cautious with these guys.

“A couple of insurers that I’ve interacted with have taken quite a strong stance with claims farmers and loss assessing businesses and the like. For example, if they’re not registered with the FCA, they just won’t deal with them. But I think it’s still early. I’m just of the view that there is plenty of opportunity for them, there is inclination for them and certainly there is incentive for them.”

Claims farmers are also seeking to get in on the action surrounding business interruption (BI) claims, contacting individuals to see whether their company needs help making a claim. This could prove particularly pertinent as the government’s furlough scheme, as well as other supporting measures, end in October, meaning that more organisations could be facing financial hardship and stress this winter.

Philip Warren, claims crime prevention manager at LV=, for example had received a personal call from a claims farmer on this topic; he noted that these fraudsters were praying on individuals’ financial worries.

However, Ben FitzHugh, national head of intelligence at BLM, thinks that Covid-19 has not impacted on claims farmers too dramatically. Prior to the pandemic, FitzHugh noted that farmers were already moving away from personal injury claims towards financial lines and Japanese knotweed claims – he added that coronavirus simply accelerated certain claimant firms’ behaviour.

Aside from claims farming, Catherine Burt, national head of counter fraud at DAC Beachcroft, said she has seen more fraudulent claims within the motor arena, for example phantom passenger claims after liability has been established and the driver’s claim has been settled - she believes these are linked to Covid-related financial hardship.

Furthermore, she noted “definite trends” in terms of credit hire, with extended hire periods due to quarantining and “extortionate” cleaning costs, again linked to the virus.

Responding to this, Kirsty McKno, chair of The Credit Hire Organisation, said: “There is a degree of science in that, particularly at the outset of the Covid pandemic when it wasn’t really known how long you needed to quarantine a vehicle [for]. It feels like to me what we’re facing is more validation work than anything else.

“The [General Terms of Agreement] actually developed a statement of principles in terms of how credit hire companies and insurers should work together during the pandemic, and that meant doing things like beefing up litigations so that we were ensuring, not only at the outset of hire but during the hire, that there was a genuine need for the vehicle because we all anticipated that durations would extend out – it was an inevitable consequence of repairers not being able to secure parts, vehicles being stuck in bodyshops.”

McKno continued that credit hire organisations and insurers need to collaborate to ensure that validation work is not “onerous”.

On the subject of motor fraud, McKno, Burt and Tom Wilson, senior counter fraud manager at AXA, noted that automatic number plate recognition (ANPR) technology has also proved very useful – Wilson added that AXA has been using the tool a lot this year.

Burt added that employers’ liability and public liability claims are also on the horizon, however she has not seen an influx of these just yet.

Online dangers

Another growing trend identified by attendees is the use of Google adverts, where fraudsters impersonate insurers online – if a policyholder does an online search for their insurer, for example, the fraudulent Google advert is designed to appear higher than the legitimate website address, attracting more people to click through.

This was a particular concern for McKno as credit hire firms could unwittingly end up “laundering” claims farmers’ cases.


Exaggerated claims also appear to be on an upwards trajectory, especially in motor and home insurance. Burt said: “People think that fronting an insurance policy is perfectly acceptable, putting somebody else’s name down as the main driver to get a cheaper premium. When you haven’t got much money, that’s probably quite tempting. [The solution] is about publicity and it’s about warning people of the consequences of that.”

Anna Baker, anti-fraud manager at Ticker, agreed with the need for greater publicity, stating that her job role now is fundamentally around fraud education rather than fraud detection. At her firm, for example, she has seen parents use their own no claims discount (NCD) for their children’s car insurance policy in order to drive down costs, while also using the discount on their own policies.

Speaking to this point, Donna Scully, director at Carpenters Group, which sponsored the event, said: “That’s where fundamental dishonesty became very good for us claimant lawyers. It’s very powerful to make them think about. Exaggeration is actually fraud and it is a crime.”

Fraud statistics

Fraud Charter attendees also gave their view on the ABI’s fraud statistics, published in early September. These reported that insurers discovered a total of 107,000 fraudulent insurance claims in 2019, worth approximately £1.2bn – this is a 5% increase on the fraudulent claims detected in 2018.

While Scully mused over the potentially “depressing” portrait these figures painted, Burt took a more positive view, adding that the increase to 2,000 dishonest insurance applications a day in 2019 simply means that the industry is getting better at detecting this type of scam.

Crystal also noted the 14% decrease in liability fraud over 2019, amounting to 19,000 cases. He said that this was typically influenced by tour operator sickness claims, which will inevitably continue to fall bearing in mind the travel restrictions imposed due to the ongoing coronavirus pandemic.

He added, however, that commercial insurance appears to remain relatively untouched in terms of fraud, describing it as an “untapped opportunity”. This could very soon be set to change though, as government support measures introduced to aid businesses during the Covid-19 pandemic are now petered to an end and financial hardship could drive opportunistic fraud in this sector.