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Insurers uncover 350 insurance frauds worth £3.6 million every day.
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Value of frauds detected at a record high.
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Value of frauds uncovered in 2014 double the cost of retail crime*.
The £3.6 million a day saved by exposing insurance cheats is one of the factors helping to keep the cost of insurance down for honest customers, with the price paid for the average comprehensive motor premium down 5% in 2014, and the average price paid for home contents down 3%**.
ABI’s figures reveal that in 2014:
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Insurers detected 130,000 fraudulent claims, equivalent to 350 every day, up 9% on 2013. The value of these frauds was £1.32 billion, a 3% increase on 2013. Between 2009 and 2014 the overall value of frauds detected has risen by 57%
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Dishonest motor insurance frauds were the most common and of highest value – 67,000, up 12% on 2013, valued at £835 million, up 3% on 2013.
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The number of liability insurance frauds detected jumped by 75% to 19,800, with a value of £330 million, a 20% rise on 2013. This reflects insurers’ greater focus on bogus liability claims, including ‘slip and trip’ claims, and industrial deafness.
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The fall in the number of detected fraudulent property insurance claims (both domestic and commercial) reflects the strong deterrent message hitting home to potential cheats. In 2014 the number of detected property frauds at 24,533 was down 29% on 2013, with the detected value at £108 million down 21%.
James Dalton, ABI’s Director of General Insurance Policy, said:
"Insurers are determined to do whatever it takes to identify and take tough action against fraudsters to protect their honest customers. The vast majority of customers are honest, and should not have to pay for the fraudulent minority. The insurance industry invests heavily in its counter fraud defences, and the results are helping to keep motor and home insurance competitively priced.
"Insurance cheats are now more likely to get caught than ever before, whether they are making a dishonest claim or lying when applying for cover to get a cheaper premium, and face long-lasting and serious consequences. As well as the possibility of serving a custodial sentence, they will find it difficult to obtain vital financial services such as mortgages and loans, future job prospects are likely to be adversely impacted and family relationships suffer.
"Initiatives such as the Government’s Insurance Fraud Task Force and the growth of the Insurance Fraud Register show that there will be no let-up in the battle against insurance fraud. Honest customers rightly expect nothing less."
As well as helping to keep premiums competitively priced, the wider benefits for society of tackling insurance fraud include:
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Reducing the risk of physical harm to innocent motorists through the work of the Insurance Fraud Bureau and the Insurance Fraud Enforcement Department (IFED) tackling fraudsters who are coordinating ‘crash for cash’ staged motor crashes.
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Reducing waste and delay. This includes time that doctors are asked to confirm fake injuries, such as whiplash, the emergency services called to staged road crashes, the time and money spent by the courts, the police and insurers in investigating fraudulent claims.
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Preventing fraudsters using the proceeds of insurance fraud to fund or facilitate other serious crime, such as drugs trafficking.
Ben Fletcher, Director of the Insurance Fraud Bureau (IFB), said:
"The resolve to fight insurance fraud through effective collaboration and partnerships with law enforcement, government and public sector organisations is making an impact to protect the honest customer. By tackling cross-industry fraud that insurers alone cannot eradicate the Insurance Fraud Bureau is working with the insurance industry and police forces across the UK to detect fraudsters and bring them to justice. The consequences for insurance cheats can be life-changing as they face the prospect of heavy fines, a criminal record and imprisonment plus potentially restricted access to financial services."
City of London Police Detective Chief Superintendent Dave Clark, Head of the Economic Crime Directorate which houses the Insurance Fraud Enforcement Department, said:
"Since the launch of the Insurance Fraud Enforcement Department in January 2012, its work with industry has seen detectives investigate millions of pounds worth of insurance fraud perpetrated against the sector and consumers. The unit takes the fight to fraudsters across England and Wales 365 days a year, with 1,150 arrests and voluntary interviews undertaken and many court convictions secured in just three and a half years. Looking forward, the team will continue to work with partners operating within the market to ensure the criminals feel the full force of the law."
See the case studies: Insurance frauds detected by the City of London Police’s Insurance Fraud Enforcement Department.
*The British Retail Consortium annual crime survey 2013-14 showed cost of retail crime at £603 million in 2013/4.
**ABI Quarterly Premium Tracker Indices.
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