Fraudsters target bigger payouts as false claims hit £1.3bn

UK insurers detected £1.34bn of fraudulent insurance claims across 2025, a substantial 14% increase on the £1.18bn of illegal activity seen during 2024.

This is according to new figures – released today (6 October 2026) by the ABI – which also revealed that despite the rise in illegal claims value, the actual number of claims fell by 2.7% between years to 93,900 incidents.

This means that the average fraudulent claim seen in 2025 had a value of £14,300 – the second highest figure ever recorded, behind only the £14,600 figure seen in 2022.

Motor – which accounted for 55% of claims – property and travel insurance all independently saw fraud value climb as cases dropped, suggesting that fraudsters are increasingly targeting bigger payouts as part of more sophisticated scams.

Indeed, while exaggerated losses remain the biggest single fraud mechanism, contrived incidents – whereby scammers deliberately stage or cause an incident – saw the biggest growth in occurrences, up by 30% year-on-year.

Rising costs

Mark Allen, head of fraud and financial crime at the ABI, said: “As emerging technologies such as artificial intelligence (AI) become more widely available, fraudsters will continue to look for new ways to exploit them.

“Insurance fraud pushes up costs for everyone, making it more important than ever that as an industry, we continue to work together to detect, prevent and deter fraud across all lines.”

Ursula Jallow, director at the Insurance Fraud Bureau (IFB), added: “Insurance fraud is devastating. It costs honest consumers when times are already tough. Through our IFB Connected to Protect strategy, we’re taking every opportunity to collaborate with our members and partners across the public and private sectors to protect more people.

“By harnessing technology and innovation, strengthening detection and disruption, and raising public awareness of the signs of scams, we’re standing together to fight fraud at every level.”