Aviva uncovered more than 12,000 instances of claims fraud in 2020, worth more than £113 million. That’s more than 19,000 claims under investigation and amounts to 33 a day—more than one every hour.
Whiplash fraud continues
Despite a fall in traffic volumes through multiple lockdowns, the proportion of fraud detected on motor injury claims grew by 20%. Whiplash fraud continues to represent the majority of detected fraud, accounting for 60% of all claims fraud detected.
More than three-quarters of the motor insurance claims fraud Aviva detected was committed by third parties (ie, not Aviva’s customers), and approximately 15% of motor claims fraud was linked to organised fraud activity.
According to Aviva, the increase in detected whiplash fraud underlines the serious need for the new reforms, which came into effect on 31 May. These will reduce the disproportionate compensation and fees in the system, strike at the root cause of whiplash fraud, and help to keep premiums low for genuine customers.
Policy fraud and ghost broking
Additionally, Aviva identified fraud on more than 29,000 motor policy applications, up by 34% on Aviva’s 2019 figures. Ghost broking now represents approximately 20% of policy fraud, and is when an unauthorised person acts as an insurance intermediary fraudulently taking out motor insurance policies, often for a fee.
Ghost brokers typically target vulnerable customer groups, such as non-English speaking communities and young drivers who face higher premiums. Aviva has a dedicated team focused on the problem and helping genuine customers, and has invested in technologies to improve prevention and detection.
Slips, trips and falls
Frauds committed against businesses’ employers liability and public liability insurance policies grew slightly, with the proportion of detected fraud up 5% on 2019 figures. Among the most common of these claims (one in four liability claims) are ‘slip and trips’.
In some instances, fraudsters have tried to capitalise on the safety measures that businesses have put in place to prevent the spread of Covid-19. As an example, Aviva has identified multiple bogus injury claims stemming from a fall due to hand sanitiser on the floor.
Property fraud
The proportion of home insurance claims that were rejected for fraud grew by 26% in 2020. Home insurance fraud detection is a priority focus for Aviva in 2021 and the insurer expects to see the number of claims rejected for fraud continue to rise.