We are the voice of insurance and long-term savings | Contact us

Insurance cheats feel the heat value of fraudulent claims uncovered by insurers hits record level

The value of fraudulent insurance claims uncovered by insurers rose to a record £1.3 billion in 2013, up 18% on the previous year according to figures published today by the Association of British Insurers. This figure is more than double the cost the UK’s shoplifting bill1.

The ABI’s latest figures on insurance frauds uncovered in 2013 show that:

  • Insurers detected a total of 118,500 bogus or exaggerated insurance claims, equivalent to 2,279 a week. The average fraud detected across all types of insurance products was £10,813. While there was a small fall in the number of detected frauds their value, at £1.3 billion, was up 18% on 2012.
  • Fraudulent motor insurance claims were the most expensive and common, with the number of dishonest claims at 59,900 claims up 34% on 2012 and their value at £811 million up 32%.
  • The number and value of property insurance frauds fell on 2012: 35,000  frauds worth £137 million. These figures represent falls of 38% and 24% respectively on 2012. 
  • Since 2007 the value of dishonest general insurance claims detected has more than doubled, with the number detected up 30% over the same period.

Insurance industry initiatives that are turning the screw on the cheats include:

  • Investigations by the Insurance Fraud Enforcement Department, a specialist police unit dedicated to tackling insurance fraud, have so far led to 470 arrests and 85 prosecutions of insurance fraudsters since it was established in 2011.
  • Calls from the public reporting suspected insurance frauds into the Insurance Fraud Bureau’s Cheatline rose by 32% to 6060 in 2013 over the previous year.
  • The Insurance Fraud Bureau (IFB) was created in 2006 to specifically tackle organised cross industry motor insurance scams. Currently the IFB is supporting police forces and insurers investigate 110 ‘crash for cash’ scams, throughout the UK. These scams alone represent approximately £120 million of financial exposure to insurers.

Aidan Kerr, the ABI’s Assistant Director, Head of Fraud, said:

"The vast majority of customers are honest and rightly expect tough action against the fraudsters. Insurance fraud is not a victimless crime, which is why the industry invests £200 million a year in fraud detection, including funding the Insurance Fraud Enforcement Department, and developing the Insurance Fraud Register, a central database of known insurance cheats. The more that is done to crackdown on the dishonest, the quicker and more effectively insurers can deal with the claims from the honest majority.

"The message is clear: never has it been harder to get away with committing insurance fraud; never have the penalties - ranging from a custodial sentence and a criminal record to difficulties in obtaining financial products in the future -  been so severe.”

Examples of insurance cheats exposed include:

  • Sixty people, including seven members of the same family, were convicted of a crash for cash staged accident fraud which involved over £514,000 being claimed from 25 vehicle crashes alone.
  • A professional golfer who claimed £8,000 on his income protection policy for a knee injury that he said left him unable to work, was caught on camera giving golf lessons. He was ordered to do 140 hours unpaid community work.
  • A bus company was forced to scrap a bus route after it was targeted by ‘crash for cash’ fraudsters.
  • A woman was jailed for twenty two months following a series of invented street robberies for items including laptops and designer clothes.
  • A vet was jailed for two years for inventing veterinary claims totalling nearly £200,000 for treating non-existent pets. 

1. British Retail Consortium Retail Crime Survey 2012-3

Last updated 01/07/2016