Investigations and arrests lead to saving of £15m in first year of operation

The Insurance Fraud Bureau (IFB) has slashed the cost of organised insurance fraud by nearly a third, saving the insurance industry £15m in its inaugural year.

After a year that has seen 20 IFB-related police investigations and 74 arrests, the organisation said it was considering plans to increase its operational size and scope. This could include targeting commercial motor claims.

Sue Jones, head of unit at the IFB, said: “What we set out to do was to impact the top £50m of organised insurance fraud, and that is what we’ve done.

“Because our members deploy their own systems to identify organised fraud, it was inevitable that they had already found a number of claims in the rings themselves, and we estimate the total value of fraud identified to exceed £15m.”

John Beadle, chairman of the IFB, said: “We will be looking at a whole range of issues going forward – including capacity. This ultimately could lead to more investment.”

The IFB said it would not rule out expanding its operational team, and said it had seconded a fraud specialist from one of its members to deal with intelligence reports.

Jones said: “We plan further short-term secondments from members and do not rule out the possibility of secondments from law enforcement in the future.

“We are currently looking at whether there needs to be an expansion to the IFB service,” she added. “In the past we’ve spoken about the possibility of looking at other known risks, in particular commercial motor claims.”

Meanwhile, calls to the IFB’s tip-off hotline, Cheatline, have increased by 175% to over 500 in the past year. The IFB receives over one call a week relating to organised fraudulent activity – one of which has resulted in a full-scale investigation.

The IFB’s work has attracted interest from outside the UK, including insurance trade associations in Italy, South Africa and the US.

Richard Davies, deputy chairman of the IFB, said that attempts to raise the profile of the organisation by highlighting the safety implications of “cash-for-crash” scams at Westminster had proved successful.

“Public safety messages have been clearly understood. The government has acknowledged that the IFB is a credible anti-fraud body.”

He added that the efficiency and cost-saving implications of the organisation had also proved helpful. “A return of five to one is not bad for a start-up investment.”

Beadle added: “There is a chunk of softer benefits, including a longer term reduction of risk, which will impact on policyholders.”

Moving forward, officials pointed to upcoming legislation and forging closer relationships with other data-sharing entities as keys to future success. Jones added that the IFB’s relationship with the Serious Organised Crime Agency was crucial, particularly with the ratification of a statement of information sharing practice (part of the Serious Organised Crime and Police Act, enacted in the spring) being imminent.

“The Act opens the gateways. The statement sets out the practicalities of how this will work with relevant organisations,” she said.

The IFB said it was also talking to the UK Payments Association, APACS, in an attempt to develop its data sharing network.

IFB by numbers

Projected savings £15m
Assets seized £5.5m
Investigations carried out 6
Investigations under way 14
Arrests made 74
Cheatline calls since August 539
Intelligence reports issued 370
on 2,059 claims)