Insurance Scams Totaling £1.3bn Detected in 2017

According to research published by the Association of British Insurers (ABI), one insurance scam is discovered every minute.

The figures revealed that in 2017, a total of 562,000 insurance frauds were discovered by insurers, of which 449,000 were dishonest insurance applications and 113,000 fraudulent claims.

The value of the fraudulent claims according to the ABI was £1.3bn. It added that while the number of fraud crimes reduced by 8% compared to 2016, the value rose slightly by 1%.

The organization stated that the drop in numbers "reflects the industry's collaborative work in detecting and deterring fraud".

In the mean time, the number of organized frauds, including staged motor accidents, dropped by 22% in 2016 with scams worth a total of £158m detected.

The ABI noted that the reduction in this type of scams reflected the Fraud Enforcement Department's (IFED) and the Insurance Fraud Bureau's (IFB) Insurance work to investigate a rising number of suspected frauds.

It added that since the IFED was formed in 2006, it has secured over 400 court convictions for insurance fraud.
The value of the 67,000 detected fraudulent car insurance claims in 2017 rose by 4% to £775m.

The number of detected fraudulent property insurance claims however, fell to 22,000 in 2016, an 11% decrease. Claims were worth a total of £100m.

Insurers also discovered 449,000 cases of suspected or confirmed application fraud, many of which were individuals trying to obtain cheaper motor coverage.

ABI's director, General Insurance Policy, James Dalton, said: "The vast majority of insurance customers are honest, and they rightly resent fraudsters pushing up their insurance costs.

"This is why the industry makes no apology for spending around £250m each year on measures to tackle insurance fraud."

He added: "It is good that organized fraud fell, especially as scams like staged accidents often put lives at risk and involve huge amounts of money.

"But, with the Insurance Fraud Bureau currently investigating a rising number of suspected insurance frauds, there will be no let-up in the crackdown on the insurance cheats.

"The rise in opportunistic motor fraud highlights that the stricter regulation of claims management companies, some of whom encourage dishonest claims, cannot come in soon enough."

Ben Fletcher, director of the IFB, added: "These numbers go to show the complexity of the task that insurers and the industry have in fighting insurance fraud.

"IFB has seen a rise in the number of live investigations, as well as a more diverse range of fraudulent behaviors, as these criminals move to target new areas.


"Fraudsters are tenacious and regularly change their methods, moving between products, sectors and approaches. They will exploit any area they are able, and the industry faces a constant battle to stay one step ahead."

Fletcher also explained that the IFB does not underestimate the challenge of insurance fraud, noting it is an issue that the insurance industry "takes very seriously and has been investing heavily in combating in recent years".

He concluded by saying: "These results are encouraging and demonstrate to the would-be fraudster that the insurance industry is a hostile environment and every effort is being made to catch and stop them."

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