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Insurers adapt to the unprecedented challenges of the pandemic, with the value of the average general insurance fraud and detection rates both up.
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Fraudster who ate the evidence, a father and son crash for cash duo, and an accident-prone gardener among the cheats exposed.
A travel insurance cheat who tried to eat incriminating evidence, and a supposedly accident-prone gardener who was caught out weightlifting were among the more unusual general insurance frauds uncovered by insurers according to the latest detected general insurance fraud figures published today by the Association of British Insurers (ABI).
In the face of the unprecedented challenges of the pandemic, insurers continued to thwart Insurance cheats to protect honest customers. Despite a fall in the overall number of insurance frauds detected in 2020, mainly due to fewer motor insurance claims, both the value of the average fraud and fraud detection rates increased on 2019. This demonstrates how well insurers’ fraud investigation teams adapted to working remotely.
The ABI’s latest detected general insurance fraud figures highlight that in 2020:
- The number of detected fraudulent claims fell to 96,000 down 10% on 2019 to the lowest since 2007. Their value, at £1.1 billion, also fell on the previous year, but at a lower rate of 4%. This resulted in a rise in the value of the average fraud detected to £12,000, up 6% on 2019.
- Fraud detection rates rose, both by number (up 0.02 percentage points), and by overall value (up 0.47 percentage points). This shows the level of detected fraud measured against all claims made.
- Insurers detected proportionately more motor insurance fraud than in 2019, despite a fall in the overall number of motor insurance claims due to fewer vehicles on the roads during lockdowns. Detected motor frauds fell by 6% to 55,000, while their value fell by only 1% to £602 million. However, detection rates rose – by number up 0.55 percentage points to 2.05%; by value up 1.31 percentage points to 6%
- The number of property insurance frauds fell by 10% to 24,000, with their value, at £111 million, down 9%.
- With fewer businesses open and people making fewer journeys during the lockdowns, the number of liability insurance frauds, at 14,300, were down 18%, with their value, at £412 million, down 6 %
- Reflecting much reduced overseas travel, detected travel insurance frauds dipped. There were 770 detected scams, down 49%. However, their value, at £1.8 million, showed a 2% increase. This led to the highest ever recorded average claims value of £2,358. During the pandemic travel claims focused on cancellation and curtailment.
Examples of insurance cheats caught out and who received a criminal record include:
Hard to swallow. A man made a fraudulent travel insurance claim for £13,000 for alleged medical costs in treating an ear injury while in Florida. The hospital had no record of carrying out the treatment, and when confronted, the fraudster tried to eat forged documents to support his claim.
Stolen’ car parked around the corner. A fraudster claimed £30,000 for the theft of his luxury Aston Martin car, only for it to be discovered stored at a garage just a few hundred yards from his workplace
Not so accident-prone gardener. A gardener made several fake claims for alleged injuries to his knee and elbow – one after he said he had slipped on decking, another while tripping on stairs. His claims fell apart when social media posts showed him weightlifting and jet skiing despite claiming to be incapacitated by his injuries. He also claimed for tools stolen from his van, which was exposed when evidence he provided of the damage caused to breaking into his van was proved to have pre-dated the alleged theft by three months.
Father and son serial crash for cash duo. A father and son carried out five staged crash for cash road incidents which would have netted them £35,000 if successful. Over two years they used various names, submitting fake vehicle engineer reports detailing the alleged damage.
A coach load of fake claims. A coach driver made several fraudulent claims under his employer’s healthcare scheme for himself and family members, including non-existent overnight hospital stays. He also organised similar fake claims for work colleagues.
Ghost broker busted. A man was convicted of pocketing nearly £18,000 in a five-week spree of selling over 40 bogus motor insurance policies.
Mark Allen, ABI’s Chief Fraud and Financial Crime Officer said:
“Insurers adapted very quickly to the unprecedented challenges of the pandemic, to protect and support their honest customers through the most difficult of times
“Reflecting significantly fewer motor insurance claims last year during the lockdowns, it is no surprise to see a fall in detected frauds last year. Also having an impact have been the various support schemes from the government to help individuals and firms cope with the financial hardship which can ordinarily lead to increased insurance fraud.
“However, the rise in fraud detection rates shows that, however difficult the circumstances, insurers will continue to do all they can to crackdown on fraud to protect their honest customers. As ’the new normal’ kicks in, the industry will remain vigilant against the fraud threat.”
Ben Fletcher, Director of the Insurance Fraud Bureau (IFB), said:
“The pandemic has brought unprecedented challenges for the counter-fraud sector, but thanks to the industry’s collaborative efforts insurance fraud has been prevented from rising as much as first predicted.
“Whilst we welcome this good news, we must not be complacent. The disruption caused by COVID means many people continue to face economic hardship which sadly provides fertile ground for fraud. Not only does insurance fraud push up everyone else’s premium costs, but some scams such as deliberately caused collisions can put innocent people at serious risk of harm.
“In these challenging times, it’s essential that the public continues to be vigilant and reports evidence of insurance scams to our confidential Cheatline, so we can work with the police to keep fraud down and protect consumers.”
Detective Chief Inspector Edelle Michaels, Head of the City of London Police’s Insurance Fraud Enforcement Department (IFED), said:
“The Covid-19 pandemic reminded us how crucial collaboration across the industry and with law enforcement is in stopping insurance fraud. It is promising to see that the rate of frauds detected by insurers increased last year, demonstrating the industry’s resilience in protecting its customers. IFED worked hard to act upon these detections, with the number of arrests executed by the unit more than doubling (124%) last year in comparison to 2019.
“We are pleased that, in spite of a number of court cases being postponed because of Covid-19, a number of audacious fraudsters were brought to justice last year following investigations by IFED supported by the industry. These results will hopefully act as a deterrent to any would-be criminals as life begins to return to normal and more opportunities to commit insurance fraud arise.”
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Notes for Editors
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