Average detected fraud worth £10,813 as cross industry co-operation helps crackdown

The value of fraudulent insurance claims uncovered by insurers rose to a record £1.3 billion in 2013, up 18% on the previous year, according to figures published today by the ABI.

The trade body pointed out that the figure is more than double the UK shoplifting bill.

The average fraud uncovered rose to £10,813 from £8,750 and insurers detected 118,500 bogus or exaggerated claims, equivalent to 2,279 a week, and a slight fall on 2012.

Fraudulent motor claims overtook home insurance to become the most commonly detected fraud and remained the most costly.

Insurers rooted out 59,900 of them, up 34% on 2012 and at a value up 32% to £811m.

The number of property frauds fell by 38% to 35,000 and their value fell 24% to £137m.

Meanwhile, the Insurance Fraud Bureau’s Cheatline took 6,060 calls from the public last year, 32% more than in 2012.

ABI assistant director and head of fraud Aidan Kerr said: “The message is clear: never has it been harder to get away with committing insurance fraud; never have the penalties – ranging from a custodial sentence and a criminal record to difficulties in obtaining financial products in the future –  been so severe.”

Insurers spend more than £200m a year on fraud detection, including funding the Insurance Fraud Enforcement Department and developing the Insurance Fraud Register, a central database of known insurance cheats.

“The more that is done to crackdown on the dishonest, the quicker and more effectively insurers can deal with the claims from the honest majority,” Kerr added.