Fraudulent insurance claims add almost £1 per week to the cost of the average household's insurances, according to figures released today (2 December) by the Association of British Insurers. The Association's annual fraud survey estimates the cost of fraud to be £645 million in 1998, up 8% on the previous year. To combat the problem, the Association will shortly be unveiling a series of wide-ranging initiatives to reduce insurance fraud.

Mark Boléat, ABI's Director General, said:

"Reducing fraudulent claims is one of the industry's key priorities. Greater awareness among claims staff, and initiatives undertaken by the Association's Crime & Fraud Prevention Bureau, have helped expose more frauds than ever before.

"We are determined to do even more to protect our honest policyholders, and will be stepping up our fight against insurance cheats with the development of new initiatives to drive down the cost of fraud. The message to fraudsters is clear - anyone thinking of making a false claim is more likely than ever to be caught and be prosecuted."

Key findings from the survey are:

• As a percentage of premiums, fraud increased from 3.6% in 1997 to 3.7% in 1998.



• Motor fraud cost £26 million more than in 1997. This reflects activities of dishonest accident management companies, solicitors and doctors who submit fraudulent and inflated claims for vehicle damage, hire and bodily injury following road accidents.



• Personal accident and travel insurance fraud rose, both proportionately and in amount, from £140 million in 1997 to £168 million in 1998.



• Ten per cent of income protection insurance claims are suspected to be fraudulent.



• Commercial property insurance fraud rose by £3 million to £43 million.

Full details of the current extent of insurance crime and fraud and industry initiatives will be outlined today (2 December) at the Association's annual crime seminar in Birmingham held in conjunction with the West Midlands Police. These include a nationwide public awareness campaign, a free confidential telephone hotline for people to report insurance frauds and development of a commercial claims database to tackle commercial property fraud.

Attended by 150 representatives from insurance companies, police, loss adjusters, government agencies and other organisations, the seminar will also consider the latest developments in tackling crime and fraud, drawing on the experience and expertise of the police, medical practitioners and insurers.

Edward Crew, Chief Constable, West Midlands Police, said:

"We are delighted that this prestigious conference is being held in Birmingham for the first time. I hope it will provide us with the opportunity to continue to develop the working partnership which exists between the police and the insurance industry and examine ways of tackling the growing problem of fraud."

Notes

1. Examples of insurance cheats who have been caught out are attached.



2. The Crime & Fraud Prevention Bureau Annual Report 1998, which describes the industry's anti-fraud initiatives, is available on request.



3. Enquiries to:
   Vic Rance 020 7216 7440
   Malcolm Tarling 020 7216 7410
   



4. An ISDN line is available for broadcasts.