Insurers identified 84,400 fraudulent claims in 2023, 11,800 more than the previous year, and the average value was £13,000.
For the first time, the ABI’s latest figures also include details on the type of fraud scammers attempted to commit. Exaggerated loss, the deliberate attempt to increase the cost of a claim beyond its true value, was the most common with 25,700 claims amounting to £407 million.
Motor insurance continues to be the area where insurers see most fraudulent claims occurring, and they detected 45,800 motor scams worth £501 million. This is 8% more than in 2022, and represents 54% of all claims made throughout the year.
Insurers also identified 16% more fraudsters from making fake property insurance claims, worth £143 million.
Alongside this, insurers prevented an estimated 583,000 fraudulent insurance applications, a 17% increase from 2022. Application fraud is when important information is purposefully misrepresented or hidden for financial gain.
Case studies of some of the cheats exposed.
Ghost broker exposed. A man convicted of pocketing £200,000 by selling over 900 fraudulent motor insurance policies was sentenced to 24 months imprisonment, suspended for 2 years, and ordered to complete 220 hours of community service.
The Lie Detector Says… A woman who exaggerated the injuries she sustained in a road traffic collision and tried to make a fraudulent civil injury claim worth £492,141 was sentenced to 12 months imprisonment suspended for 18 months, after she was caught out by evidence including footage from The Jeremy Kyle Show.
In a similar case, a man who exaggerated the cost of damage to his car by over £40,000, following a road collision, was sentenced to 12 months imprisonment.
If it ain’t broke, don’t claim for it. A serial fraudster who submitted a series of claims for broken TVs, laptops and phones, pocketing £11,750, was sentenced to 20 months imprisonment and ordered to pay £140 victim surcharge.
Fake it till you don’t make it. A man who changed his name multiple times by deed poll and used the identities of his family and friends to make bogus travel insurance claims worth an estimated total of £75,000, was sentenced to 20 months imprisonment, suspended for two years, and ordered to complete 200 hours of community service.
Commercial con crackdown. Ten people were arrested across the country and 18 vehicles seized during a two-week police operation to tackle commercial insurance fraud. Police targeted people making bogus claims on motor and business premises insurance, ghost brokers who sold fake motor insurance policies for vehicles used for business purposes, and fraudulent claims made by employees on their corporate benefit plans.
Mark Allen, the ABI’s Assistant Director, Head of Fraud and Financial Crime, said: “Insurance is there to protect people and businesses should the worst happen. It's encouraging to see that the industry's efforts to detect and prevent people from abusing this are working, but there can be no let-up in pursuing insurance fraudsters.
"Fraud doesn’t just impact victims that fall foul of the scammers, it affects everyone that pays for an insurance policy – with bogus claims pushing up the cost of premiums for all. That’s why cracking down on fraud continues to be a top priority for our industry.
“Consumers also need to remain vigilant to potential scams, and our latest online fraud campaign aims to help everyone to learn how to protect themselves in an increasingly digital world. The golden rule is never act in haste – if a deal appears too good to be true, then it probably is. If you suspect a fraud has been committed, you can report it confidentially to the IFB’s CheatLine.”
Ursula Jallow, Director at the Insurance Fraud Bureau (IFB), said: "With a rise in detected fraudulent insurance applications and claims, it's never been more important to raise awareness about the impacts of insurance fraud. Whether it’s raising awareness with those who are thinking of making an exaggerated fraudulent claim or raising awareness with members of the public who could be the victim of an insurance scam.
"We're collaborating closely with insurers, law enforcement agencies and industry bodies to ensure that we protect the UK public from insurance fraud and scams as these can be devastating, financially, socially and psychologically.
“We urge anyone with evidence of an insurance scam to report it to our confidential CheatLine"
Detective Chief Inspector Tom Hill, from the City of London Police's Insurance Fraud Enforcement Department (IFED), said: "Insurance fraud is not a victimless crime. It increases the cost of premiums for honest customers, while fraudsters who sell fake car insurance or deliberately cause road traffic collisions to claim compensation put innocent motorists at risk.
“The figures released today show that around 230 fraudulent insurance claims are detected on average each day, showing that IFED and the insurance industry will root out fraudsters and bring them to justice.”
The latest figures from ABI come following its online fraud campaign, which aimed to raise awareness of types of fraud carried out online and through social media by using case studies, digital adverts and partnering with influencers. More information on the different types of online insurance fraud and how to avoid being targeted is available via the ABI website.
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