The industry faces a challenge in both identifying insurance fraud and educating consumers about it


The public’s attitude towards motor insurance fraud has hardened in line with insurers’ as the link between organised fraud and motor policy pricing is made more explicit. Cash-strapped motorists are more likely to be sympathetic if they see insurers cracking down.

But for other types of fraud, public opinion is more mixed. Specifically, application fraud and inflated claims are seen as relatively acceptable forms of ‘playing the system’ (see The big story). These cases cheat insurers out of relatively small sums individually, but the cumulative effect may be just as costly as organised scams - or even more so.

More data is needed on the cost of application fraud if the industry is to bridge the perception gap and encourage insurance buyers to lower their tolerance of insurance fraud.