Editor Katie Scott discusses how the ongoing cost of living crisis is seeing high net worth individuals resort to insurance fraud – an issue that has been previously ‘masked’ according to fraud experts
If there is one demographic you would expect to be immune – or at least resilient to – the ongoing cost of living crisis in the UK, then it would be high net worth (HNW) individuals.
Investopedia defines a HNW individual as having at least $1m (£0.83m) in liquid financial assets, while Credit Suisse sets this benchmark at $50m (£41.3m).
However, senior fraud professionals attending last month’s (30 March 2023) virtual Fraud Charter roundtable – hosted by Insurance Times and sponsored by Carpenters Group – emphasised that the profile of those conducting opportunistic insurance fraud has evolved to now heavily include HNW individuals.
Paul Holmes, partner at DWF Law, described HNW fraudsters as a previously “masked” issue and cited examples where dentists and business owners have faked documents.
Jon Radford, head of intelligence, investigations and data services at the Insurance Fraud Bureau, added that “opportunistic fraud is everywhere and the cost of living still pinches those with more money because they’ve got less relative to their lifestyle”.
He has seen HNW fraud around expensive watches, for example, as well as staged incidents.
“It’s definitely something that insurers are looking at with greater focus,” he emphasised.
These insights prove that no demographic can avoid the current cost of living squeeze – or the temptation to commit what is often viewed as a victimless crime – meaning that insurers and brokers must stay on their toes to detect potential pain points and trends.
To read up on further insights from the latest Fraud Charter event, click here.
On a completely unrelated note, I’d like to say goodbye for now as I head off on maternity leave for the remainder of 2023.
I may crop up at industry events later in the year – and I’m hoping my team will have good news to share with you all about my new arrival at this year’s Claims Excellence Awards in May – but I will be fully back in action at the helm of Insurance Times in January 2024.
In my absence, my trusty news editor Yiannis Kotoulas will be holding down the Insurance Times fort, so please do reach out to him with your insights and stories.
See you in 2024!