Insurance fraud decreases as industry ramps up clampdown

Efforts to tackle insurance fraud are yielding significant results with a fall in both the number and cost of dishonest claims uncovered last year, according to the Association of British Insurers (ABI).

The ABI revealed in newly released data that the number of fraudulent claims detected at 89,000 in 2021 fell by 5% compared to 2020, to their lowest since 2007. Their total value at £1.1 billion dropped 2% to the lowest level since 2012.

Motor insurance claim fraud continued to be the most common type, although last year saw a fall in their total volume and value.

There were 49,000 instances of fraud detected, down 7%, although their value, at £577 million, fell by only 1%.

The number of instances of organised motor fraud uncovered at 10,617 rose by 8%. This rise in part reflected initiatives by the Insurance Fraud Bureau to tackle crash for cash motor scams.

While property insurance fraud dropped to 18,000 compared to 24,000 in 2020, the value rose to £124 million, up 9%. This was driven by a rise in the value of commercial fraud uncovered.

The number of fraudulent liability insurance claims uncovered at 12,978 dropped by 10%. Their value, at £378,000, fell by 8%.

Mark Allen, the ABI’s chief fraud and financial crime officer, said: “Insurers continue to work hard to pay legitimate claims as soon as possible. With many households battling the cost of living crisis, more than ever honest customers rightly expect there to be no let-up in the industry’s clamp down on insurance fraud, the costs of which end up being absorbed in the premiums paid by all customers. The fall in reported insurance fraud reflects the industry’s sustained counter fraud investment and collaborative approach, but no one can lower their guard against the cheats.”

He continued: “Fraudsters thrive in hard times, preying on the vulnerable. So we urge people to be vigilant to the threat of financial scams, including those carried out online. The golden rule is if a deal looks too good to be true, then it probably is. Anyone with suspicions should check the credentials of who they are dealing with to ensure they are genuine. If you suspect a fraudulent insurance claim you should alert the free, confidential Insurance Cheatline, run by the Insurance Fraud Bureau.”

Image: Canva

Mark Dugdale