Rise in fraudulent claims as recession takes toll

The Association of British Insurers (ABI) says insurers have faced a spike in property fire damage claims and believe that customer are using to arson to raise cash in the financial crisis, the FT reports

The ABI said there was a "suspicious" jump of more than a fifth in fire payouts over the past two years, including a sharp rise in £500,000-plus claims from commercial building fires.

Commercial fire claims among ABI members rose more than 20% to £444m over two years.

Facebook checked

The Guardian said insurers are using technology to check claims are genuine and said insurers are detecting more of the fraud being committed -£730m last year a 30% increase on 2007.

Companies use interviews with staff trained in psychology and browse on Facebook, it said.

Travel insurance has among the highest levels of fraud.