Fraudulent claims increased last year, says ABI

Insurers uncovered 107,000 fraudulent insurance claims worth £1.2 billion last year, according to the Association of British Insurers (ABI).

Detected fraudulent claims increased 5% over 2018, primarily due to increases in motor and property scams. Although the volume increased, there was a small decrease of 2% in the value of detected claims fraud to £1.2 billion.

This resulted in a decrease in the average value of a fraudulent claim to £11,400, compared to £12,200 in 2018.

The ABI’s annual analysis of insurance fraud figures found motor insurance fraud remained the most common type in 2019, up 6% in volume to 58,000 over 2018, although their value, at £605 million, fell slightly.

Around 75% of those fraudulent motor claims contained a personal injury element.

Property fraud showed a significant increase. There were 27,000 dishonest claims detected worth £124 million last year, a rise of 30% in number and 8% in value over 2018.

The number of fraudulent liability claims fell by 14% to 19,000 in 2019. This may reflect insurers clamping down on ‘trip and slip’ and noise-induced hearing loss claims, as well as measures implemented by the travel sector and government to reduce dishonest gastric illness holiday claims, according to the ABI.

Improved prevention measures and better reporting reflected a significant increase in the volume of application fraud detected, up more than 200% on the previous year to 760,000 cases, worth £1.4 billion.

Mark Allen, manager of fraud and financial crime at the ABI, said: “The industry makes no apology for its relentless pursuit of insurance cheats, 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.”

Mark Dugdale