Fraudulent insurance claims worth a staggering £1.2 billion were uncovered in 2019, the latest insurance fraud investigation by the Association of British Insurers (ABI) has revealed.
The ABI’s insurance fraud stats show every five minutes another fraudulent claim is discovered — that equates to 300 every day. The sad thing is that while fraudsters still try to cheat the system, they are helping push up insurance premiums for everyone else.
Insurance fraud discovered by the City of London Police’s Insurance Fraud Enforcement Department (IFED), include:
- A serial insurance fraudster lied about his poor claims history to secure cover against which he made a series of claims for theft, burglary and damage to property, including numerous escape of water claims. He was also dismissed from his employment at a claims management company for diverting £18,000 to his own bank account and attempting to divert a further £17,000. He was jailed for more than three years.
- A man described by the judge as ‘profoundly dishonest’ was jailed for two and a half years for insurance fraud following a road accident in which he used documentation that had been tampered with.
- A policeman was convicted for a motor insurance fraud valued at £10,000 after he was incriminated by his own dashcam footage which showed that debris from a passing van that was alleged to have caused him personal injury and damage to his car turned out to be polystyrene.
- A couple were convicted after a series of claims totalling £50,000 for personal injury and damage to vehicles from accidents that never happened. They also created ‘phantom’ passengers to try to claim more money.
- A man was convicted if insurance fraud after he was caught on CCTV staging ‘slips and trips’ at a pet shop and a discount store which would have netted him £11,000
- Another man was arrested for acting as a ‘ghost broker’ selling fraudulent car insurance, including to NHS workers.
Key findings of insurance fraud investigation
Key findings from ABI’s survey of members highlights that last year:
- There were 107,000 detected insurance fraud claims, up 5% on 2018. The rise was mainly due to increases in motor and property scams.
- While the volume increased, there was a small decrease of 2% in the value of detected claims insurance fraud. The average value of a fraudulent claim fell to £11,400, compared to £12,200 in 2018.
- Motor insurance fraud remains the most common, up 6% to 58,000 on 2018, though their value, at £605 million, fell slightly.
- Property Insurance frauds showed a significant increase. There were 27,000 dishonest claims detected worth £124 million – a rise of 30% in number and 8% in value on 2018.
What the experts say about fraud
Mark Allen, ABI’s Manager, Fraud and Financial Crime, said:
“The industry makes no apology for its relentless pursuit of insurance frauds, to protect genuine customers, who end up footing the bill through their insurance premiums.
“Insurers will not hesitate to ensure that fraudsters seeking to profit at the misery and expense of others will suffer severe and long-lasting consequences.
“Insurers know that the coronavirus crisis has led to financial hardship for some, and with scammers always preying on people’s anxieties, now it is especially important for consumers to be on their guard, for scams like being approached by someone offering cheap motor insurance.
“The golden rule is never act in haste – if a deal is too good to be true, then it probably is.”
Detective Superintendent Peter Ratcliffe, Head of the City of London Police’s Economic Crime Funded Units, said: “Insurance fraud is not a victimless crime and the effect of dishonest claims are felt by everyone.
“As well as bogus insurance claims inevitably increasing premiums for honest customers, certain tactics used by fraudsters, such as ‘crash for cash’, put the lives of innocent members of the public at serious risk.”
Jen Gosnell from Adrian Flux insurance services said: “Not only does insurance fraud push up premiums for everyone, the cash for crash scenarios are putting innocent people at the risk of injury, or worse.
“We are dedicated to recognising and acting upon insurance fraud, whether at the quotation stage, during the policy or in the process of a claim, utilising the wide range of tools available to us as well as our own systems.
“There is no victimless crime, and we hope that the excellent work carried out by these organisations continues to bring those responsible to justice.”
If you suspect someone of committing insurance fraud you should contact the Insurance Fraud Bureau’s Cheatline.