Corporate risk management consultancy ISS Group warned that fraudulent activities could increase following certain countries becoming EU states. The consultancy said this would negatively impact on the insurance industry.

ISS chief executive John Wick said: "The insurance industry is increasingly at risk from clever and well executed frauds. Premiums for financial institutions could rise to counter the increased risk. While underwriters do go to great lengths, the task will be more onerous as new EC countries have different regulations."