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Insurers will do whatever it takes to protect honest customers against insurance fraud

The ABI has welcomed today’s publication of the Government’s Insurance Fraud Taskforce review of insurance fraud.

The Taskforce was announced at the ABI’s Motor Conference in December 2014, and set up in January 2015 to assess the scope of insurance fraud and recommend steps to further tackle the problem.

James Dalton, ABI’s Director of General Insurance Policy, said:

"James DaltonWe are pleased that the Taskforce’s report recognises the industry’s determination to protect honest customers by clamping down on insurance fraud through the £200 million a year the industry invests in tackling this problem. Initiatives such as the Insurance Fraud Bureau, the Insurance Fraud Enforcement Department and the Insurance Fraud Register mean that fraudsters are now more likely to get caught than ever and will face long-lasting and serious consequences, including a criminal record, a custodial sentence and difficulty in obtaining financial products, such as mortgages and loans.

"The report highlights that the wide ranging nature of insurance fraud, including opportunistic and pre-meditated fraudsters, and in some cases rogue claims management firms and solicitors, requires different approaches and collaboration between the different agencies involved. The report rightly says that action is needed to tackle rogue CMCs, nuisance calls and claims for noise induced hearing loss.

"The industry will do whatever it takes to protect honest customers from the dishonest minority, including ensuring that customers understand exactly what they are covered for, so that they can get the most from their insurance legitimately.

"The report calls for the Government to set up a body to take forward its recommendations, and we will work with whoever may be appointed to ensure that there is no hiding place for insurance fraudsters."

The recommendations around regulation of CMCs and solicitors, nuisance calls, late notified personal injury claims and noise induced hearing loss claims reflect ABI’s calls for action through:

  • Tougher regulation of CMCs. According to ABI-commissioned research, 83% of people have been contacted by a CMC encouraging them to claim.
  • Strengthening the powers of the Solicitors Regulation Authority to stamp out fraudulent or corrupt activity.
  • Discouraging fraudulent late claims through changes to court, cost and evidence rules
  • Introducing fixed legal fees for all claims for noise induced hearing loss. Currently for every £1 paid in compensation, £3 is paid in legal fees. The number of these claims jumped by 189% between 2011 -2014.

Last updated 01/07/2016