Association of British Insurers: Deception, exaggeration and invention – ABI publishes report on the rising cost of insurance fraud
Insurers are fighting back in the war against fraud. With the cost of insurance fraud now estimated to be £5.2 million every day, according to a report published today (16 July) by the ABI, insurers are detecting more of the fraud being committed.
The report highlights that:
. The cost of undetected fraudulent general insurance claims is now £1.9 billion a year, up 24% from £1.6 billion two years ago.
. Insurers are detecting more of the fraud being committed. Last year, frauds worth £730 million were detected and prevented – a 30% increase on 2007.
. Insurance fraud now adds, on average, an extra £44 a year to every household’s general insurance costs.
. More people are being caught lying or withholding relevant information in attempts to get cheaper insurance.
Nick Starling, the ABI’s Director of General Insurance and Health, said:
“There is no hiding place for insurance cheats. Honest customers should not have to pay for the fraudsters. The tough approach taken by insurers to protect honest customers means that they are detecting more of the fraud committed. Closer scrutiny of proposal forms and claims, as well the exchange of information through industry-wide databases, is tightening the net on the cheats. Getting a criminal record, as well as difficulty in obtaining and more expensive insurance and credit problem await anyone who sees insurance as a soft touch.”
The ABI also commissioned independent opinion research into public attitudes towards insurance fraud. The survey of over 3,000 adults revealed that:
. 16% would not rule out making an exaggerated insurance claim.
. Just over four in 10 (44%) think it acceptable or borderline behaviour to increase the value of an item when claiming. Three in 10 feel the same way about overstating the extent of any damage being claimed for.
. Those in the North East and the West Midlands appear the most tolerant towards insurance fraud. One in four in the North East would not rule out making a fraudulent claim. And more people in the North East and the West Midlands see inflating the value of an item, or adding an item to a claim, as acceptable or borderline behaviour than elsewhere in the UK.
Notes
1. Enquiries to:
Jonathan French 020 7216 7392 (Mobile: 07958 330 480)
Malcolm Tarling 020 7216 7410 (Mobile: 07776 147 667)
Erfan Hussain 020 7216 7411 (Mobile: 07712 841 184)
Kelly Ostler-Coyle 020 7216 7415 (Mobile: 07968 364 302)
2. The survey of 3,031 adults was conducted by YouGov Financial Services between 12-15 June 2009. The full report can be downloaded from the ABI web site, www.abi.org.uk. from 9am on 16 July.
3. Cheats exposed recently include:
. A policyholder claimed for the theft of DVDs that he said had been bought locally, despite the fact that they had yet to be released in the UK.
. Similarly, a man who claimed for damage to a 42-inch LCD TV had his claim rejected as he said he purchased it before it actually came onto the market.
. A woman claimed for the theft of her campervan, even though it had been written off beyond repair ten years previously.
. A personal injury claim was exposed when the claimant was filmed driving and shopping, despite his assertion that he was virtually housebound.
. A claimant was found in contempt of court and fined £2,500 for inflating a claim of damages for personal injury.
4. The ABI is the voice of the insurance and investment industry. Its members constitute over 90 per cent of the insurance market in the UK and 20 per cent across the EU. They control assets equivalent to a quarter of the UK’s capital. They are the risk managers of the UK’s economy and society. Through the ABI their voice is heard in Government and in public debate on insurance, savings and investment matters.
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
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