The Birmingham Assay Office has launched a jewellery registration scheme which could dramatically reduce the £650m cost of inflated claims.

The service will enable insurers to check the value and details of stolen or lost jewellery in the event of a claim.

The ABI estimates that 45% of jewellery claims are fraudulent and cost the insurance industry £650m in 1999.

The scheme is operated by Safeguard Quality Assurance, part of the Birmingham Assay Office, which records the details, including a special identity mark or Safemark and photographs of insured items of jewellery on to a central database.

Items recovered by the police and insurers can be returned to owners registered on the database.

Richard Taylor, managing director of Safeguard, said: "Customers have a much greater chance of their lost or stolen jewellery being returned and insurers have proof of the value of stolen goods and can save millions of pounds in fraudulent claims."

Household claims currently cost £170m. Taylor said his company's scheme could help in the fight against crime, while slashing the burden of inflated and fraudulent claims on insurance companies.