UK has 1,300 insurance scams uncovered every day, finds ABI report

UK Insurance industry news : The UK witnesses 1,300 insurance scams uncovered every day with the average con being £12,000, as per the annual detected fraud figures published by The Association of British Insurers (ABI) for the year 2018.

The association found that the total number of fraudulent claims and applications that were detected last year increased by 3% to 469,000, compared to 2017, while their value moved up by 6%.

Topping the insurance scams in 2018 was an organized gang that created fake motor crashes to con almost£1.2m from insurers. Coming close to the motor crash scam was another criminal gang that was seeking around £1m for damage and lost earnings from restaurants which were falsely claimed to have been flooded by burst water pipes.

ABI said that the equivalent of two cheats every week were given a criminal conviction or a warning for insurance fraud in 2018.

A total of 469,000 insurance scams were detected in 2018, said ABI. Image courtesy of IndypendenZ at FreeDigitalPhotos.net

Insurers detected a total of 469,000 insurance scams last year.  Of these, 371,000 were dishonest insurance applications, while 98,000 were fraudulent claims.

The number of fraudulent claims that were detected dropped 6% compared to 2017, while the number of dishonest applications for cover increased by 5%.

The 98,000 dishonest claims which were uncovered had a combined value of £1.2bn, which was less than 1% compared to2017.

The ABI said that motor insurance scams continued to be the most common and most expensive insurance frauds. The association reported that 55,000 dishonest claims totaling £629m were detected.

A majority of the 55,000 motor insurance frauds, at 80%, involved personal injury fraud, which ranged from fake crash for cash frauds to opportunistic scams.

Ben Fletcher – Director of the Insurance Fraud Bureau (IFB) said: “Today’s announcement by the ABI shows that organised motor fraud is still a big problem and one that the insurance industry, working together with the police, will continue to tackle.  Fraudsters are constantly reinventing themselves and application fraud and liability are areas of growth that we now need to focus on. It’s also important that members of the public continue to report suspected fraudsters anonymously through our Cheatline service, which is a valuable tool for disrupting fraudsters.”

When it came to property frauds, 20,000 of them were detected, which was on par in terms of the numbers compared to the previous year. But, the value of the property frauds in 2018 shot up by 11%to £115m compared to 2017.

Mark Allen – ABI’s Manager, Fraud and Financial Crime said: “Insurance fraud is the scourge of honest insurance customers who make genuine claims. Insurance cheats can be ingenious, and are constantly looking for new scams to exploit, which is why the industry makes no apology for spending around £250 million a year on measures to tackle this crime.

“Spearheaded by the Insurance Fraud Bureau and the Insurance Fraud Enforcement Department, there will be no let-up in the industry’s determination to root out fraudsters and press for the stiffest possible penalties for these cheats.”

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