Record fraud figures show success of insurance industry detection, prosecution


The insurance industry is getting better at detecting and prosecuting fraud, according to AA Insurance.

”The level of detected insurance fraud is at a record high. But rather than suggesting that insurance fraud is increasing, it shows that the insurance industry is getting better at not just detecting it but pushing for prosecution of offenders,” AA said, responding to the latest fraud figures from the ABI.

Stephen Gaywood, director of counter-fraud at the AA, said: “This shows that the estimated £200m the industry invests each year in fraud prevention and detection is paying dividends and confirms that those attempting to defraud their insurers are increasingly less likely to get away with it.”Acco

According to figures released today, insurers uncovered the equivalent £3.6m in fraudulent claims each day in 2014 as they continued their crackdown on dishonest policyholders, new ABI figures show.

According to the trade body’s statistics, insurers detected 130,000 fraudulent claims in 2014, equivalent to 350 a day. This was a 9% increase on 2013 levels.

The total value of the uncovered fraud for the year was £1.32bn, up 3% on 2013 levels.

Motor insurance frauds were the most common and the highest value. Insurers uncovered 67,000 motor frauds in 2014, up 12% on the number uncovered in 2013. The value of these claims was up 3% to £835m.

The number of liability frauds jumped 75% to 19,800, and the value of these frauds increased 20% to £330m.

The ABI said the increase in detected liability claims fraud reflects the industry’s greater focus on uncovering bogus liability claims, including slip and trip claims and industrial deafness.

The number and value of property claims fell, on the other hand. Insurers detected 24,533 property insurance frauds in 2014, down 29% on 2013, while the value of these claims fell 21% to £108m.

The ABI said this reflected “the strong deterrent message” to potential fraudsters taking effect.

ABI director of general insurance policy James Dalton said: “Insurance cheats are now more likely to get caught than ever before, whether they are making a dishonest claim or lying when applying for cover to get a cheaper premium, and face long-lasting and serious consequences. “

He added: “Initiatives such as the Government’s Insurance Fraud Task Force and the growth of the Insurance Fraud Register show that there will be no let-up in the battle against insurance fraud. Honest customers rightly expect nothing less.”

Insurance Fraud Bureau Director Ben Fletcher said: “By tackling cross-industry fraud that insurers alone cannot eradicate the Insurance Fraud Bureau is working with the insurance industry and police forces across the UK to detect fraudsters and bring them to justice.”

“Although these figures are to be welcomed, most insurers believe it is the tip of the iceberg,” the AA’s Gaywood said.

However, he added, “With increased pressure on premiums in the industry and particularly with the Insurance Premium Tax hike this Autumn, the industry’s focus on fraud should be stepped up, so as to reduce the risk of passing the cost on to honest policyholders.”

Chancellor of the Exchequer George Osborne announced in his budget last week that basic rate IPT will rise to 9.5% this autum from its current rate of 6%.