Every week a staggering 2,670 fraudulent insurance claims worth £19 million are being uncovered as insurers intensify their crackdown on insurance cheats according to an ABI report on insurance fraud published today (13 September). To further protect honest customers, the insurance industry today launches the Insurance Fraud Register that will contain details of all known insurance fraudsters.
The ABI report: ‘No Hiding Place-Insurance Fraud Exposed’ (pdf) highlights that in 2011:
· Insurers detected 139,000 bogus or exaggerated insurance claims, up 5% on 2010. The value of savings on these frauds was nearly £1 billion - £983million - a rise of 7% on 2010.
· Home insurance frauds were the most common with 71,000 dishonest claims, valued at £106 million, detected.
· Dishonest motor insurance claims were the most expensive with savings of £541 million made from the 45,000 bogus claims uncovered. Fraudulent whiplash claims was the main factor for the rise.
Insurance fraud now adds, on average, an extra £50 a year to the annual insurance bill for every UK policyholder
Speaking at the ABI’s tackling insurance fraud conference today, Otto Thoresen, ABI’s Director General, said:
“The industry makes no apologies for its zero tolerance approach to insurance fraud. Honest customers are sick of footing the bill for insurance cheats, through higher insurance premiums. From the highly organised ‘crash for cash’ motor scams to the opportunistic exaggeration of a genuine claim, insurers are determined to do what it takes to protect honest customers.
“The development of the Insurance Fraud Register marks a milestone in the fight against fraud. It reinforces the strong message that insurance cheats can expect difficulties in obtaining future insurance, credit and other financial products, as well as getting a criminal record.”
Richard Davies from the ABI Financial Crime Committee, who led the working group that has developed the Register, said:
“The Insurance Fraud Register underlines the industry’s continuing commitment to reducing fraud and protecting honest customers. It complements the work of the Insurance Fraud Bureau in detecting fraud, and the Insurance Fraud Enforcement Department in prosecuting fraudsters.
“The Register will make it easier for insurers to prevent fraud by making details of known fraudsters available to insurers through a secure protocol. It gives the clearest signal yet that we are more determined than ever to clampdown on insurance fraud. Those that defraud insurers and their honest customers face real and tangible consequences for their actions.”
Examples of detected frauds uncovered include:
· A group of 30 men, who hired a coach to take them greyhound racing all claimed whiplash following a staged accident with the car behind which they had arranged beforehand.
· A family made over 100 claims for damage to their property. These usually involved alleged storm damage to roofs and damage to walls caused by untraced vehicles. The family members concerned were sentenced to 15 months in prison.
· Insurers, working with Bedfordshire Police and assisted by the Insurance Fraud Bureau, helped uncover a staged motor accident gang that it was believed were involved in 180 staged and induced accidents, linked to 230 insurance claims, worth £3.2 million. In total 37 people received prison sentences.
· A man who cut his thumb in a gym made a claim for a more serious injury using a photograph he downloaded from the internet.
Notes for Editors
1. Enquiries to:
Malcolm Tarling 020 7216 7410 Mobile: 07776 147 667
Linsey White 020 7216 7415 Mobile: 07885 998011
Sarah Bailey 020 7216 7514 Mobile: 07725 372636
Adeola Ajayi 020 7216 7521 Mobile: 07725 245284
Kelly Ostler-Coyle 020 7216 7375
2. Attached are examples of insurance frauds uncovered by insurers.
3. The Insurance Fraud Register is being administered by the Insurance Fraud Bureau. The IFR will be the first complete list of known insurance fraudsters and will be critical in helping insurers make informed underwriting and claims decisions. For more information on the IFR from 13 September visit www.theifr.org.uk”.
4. The ABI is the voice of the UK’s insurance, investment and long-term savings industry. It has over 300 members, which together account for around 90% of premiums in the UK domestic market.
The ABI’s role is to:
- Be the voice of the UK insurance industry, leading debate and speaking up for insurers.
- Represent the UK insurance industry to government, regulators and policy makers in the UK, EU and internationally, driving effective public policy and regulation.
- Advocate high standards of customer service within the industry and provide useful information to the public about insurance.
- Promote the benefits of insurance to the government, regulators, policy makers and the public.
The UK insurance industry is the third largest in the world and the largest in Europe. It is a vital part of the UK economy, managing investments amounting to 26% of the UK’s net worth and contributing the fourth highest corporation tax of any sector. Employing over 290,000 people in the UK alone, the insurance industry is also one of this country’s major exporters, with 28% of its net premium income coming from overseas business.
Insurance and businesses protect themselves against the everyday risks they face, enabling people to own their own homes, travel overseas, provide for a financially secure future and run businesses. Insurance underpins a healthy and prosperous society, enabling businesses and individuals to thrive, safe in the knowledge that problems can be handled and risks carefully managed. Every day, our members pay out £147 million in benefits to pensioners and long-term savers as well as £60 million in general insurance claims.
5. An ISDN line is available for broadcasts.
6. More news and information from the ABI is available on our web site, www.abi.org.uk.