This is the second consecutive year in which the value and volume of fraudulent claims detected by Aviva has grown. By detecting and avoiding paying fraudulent claims, Aviva is helping to keep premiums low for genuine customers.
Whiplash fraud still dominant
Motor insurance remains of particular concern, representing two-thirds (£59 million) of the total value of fraud detected, and an increase of £9 million over Aviva’s 2016 figures. Highlighting the scale of the problem, Aviva now rejects around one out of eight whiplash claims it receives which are suspect or fradulent.
Despite recent industry figures showing a drop in the number of motor claims paid, these figures show that the UK’s largest insurer is not seeing any let-up in the number of bogus personal injury claims it is dealing with. In fact, the insurer is currently investigating nearly 17,000 personal injury claims for suspected fraud – 1,000 more than last year.
Aviva’s fraud figures demonstrate the importance of the Civil Liability Bill which is making its way through Parliament. The proposed legislation would, if passed, reduce financial compensation for minor personal injury claims such as whiplash, as happens in other countries. It is intended that this will remove the financial incentive for opportunistic fraud and bring down the cost of motor insurance.
The proposed legislation should also remove the financial incentives behind the nearly 900 million nuisance calls and texts made chasing an injury or insurance issue.
One improvement from 2016 is that the level of organised motor fraud has declined. However, the insurer still has nearly 3,000 suspect claims under investigation linked to organised fraud or gangs. This decrease was offset by an increase in the numbers of low-speed accidents which have resulted in bogus injury claims.
Aviva’s case involving a champion cage fighter* who was knocked out by the court for an exaggerated whiplash injury is one of thousands of examples of this type of exaggerated or fake claim.
Tom Gardiner, Head of Fraud at Aviva UK Insurance said: “Whilst it’s good news that the number of accidents is falling, we are still detecting more fraudulent claims than before. Whiplash fraud continues to present the biggest threat to customers – not just in terms of pushing premiums up, but by fraudsters putting innocent motorists at the risk of real harm by deliberately causing accidents to make bogus whiplash claims. "Change is urgently needed. The proposed Civil Liability Bill will deter fraudsters from pursuing their campaign of crash for cash, simply to line their pockets. The good news in the meantime is that we are detecting, disrupting and prosecuting more fraud.”
Detecting fraud and defending customers
In addition to detecting fraud, Aviva is working closely with the Police to bring fraudsters to justice. This action has widely been supported by the courts: last year Aviva helped to bring 68 successful criminal prosecutions for fraud, carrying 143 years of prison sentences.
Aviva is also investing in defending customers who have been wrongly accused of being at fault in an accident. The majority (80%) of fraud that Aviva detects is committed by other people against its customers. This helps to protect customers’ premiums and excesses from the impact an ‘at-fault’ claim can have.
Aviva defended its customers against more than 800 spurious claims at court in 2017 and in the last two years has had more than 250 claims against its customers ‘struck out’ due to findings of fundamental dishonesty. Such a ruling means the entire claim can be thrown out, and the claimant faces paying the costs of the action, which often exceed £10,000.
Closing the front door to fraud
While detecting and rejecting fraudulent claims is essential to protecting honest customers from the impact of fraud on their premium, Aviva is moving the fight to preventing fraud from occuring in the first place.
Aviva now screens all new and existing motor business to prevent fraudsters and gangs from buying policies with the express intention of submitting fraudulent claims. Last year the insurer avoided more than 14,000 policies where the applicant had known links to fraud. This innovative use of technology is expected to reduce the volume of fraud Aviva is subject to in the future.
Rob Townend, Managing Director, Aviva UK General Insurance said: “Detecting, stopping and preventing insurance fraud is a priority for our industry. As IFB Chair I will be focused on continuing the sustained fight against crime. We have the knowledge and expertise to stop fraudsters in their tracks and to remain one step ahead of any fresh attempts to defraud the insurance industry and its customers.”
Industry fraud role
Aviva is leading the industry in detecting and preventing insurance fraud.
Aviva’s Managing Director of UK General Insurance Rob Townend, who has just been appointed Chair of the Board of the Insurance Fraud Bureau (IFB), has long-championed the industry’s calls for meaningful personal injury reform which will remove the easy access to compensation which encourages many fraudsters.
Rob has also served on the personal injury sub-group of the Insurance Fraud Taskforce, which investigated the causes of insurance fraud and recommend solutions to reduce fraud, lower associated costs and protect honest consumers.
Liability and household fraud
Liability fraud also remains a serious concern, with Aviva reporting that it declines one out of 18 claims for bogus claims on employers liability and public liability policies. Aviva detected more than £11 million of liability fraud in 2017. The average value of a fraudulent liability claim is nearly £14,000, while the number of liability claims Aviva is investigating has grown from more than 1,000 in 2016 to more than 1,600 last year.
Household fraud has remained stable in the past year, accounting for nearly 6% of fraud. Serial fraudsters continue to target insurers with multiple claims. Aviva helped bring one such family of fraudsters to justice this year, when a man and a woman were sentenced to a total of four years and six months for fraud and money laundering offences after they submitted fraudulent insurance claims totalling £37,334.
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