Some £1.1 billion of fraudulent insurance claims were detected last year, a rise of four per cent on 2022, according to the trade body the Association of British Insurers (ABI). Insurers identified 84,400 fraudulent claims in 2023, 11,800 more than the previous year. The average value of such a claim was £13,000. 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 £407m, the ABI reports.
Motor insurance continues to be the area where insurers see most fraudulent claims; they detected 45,800 motor scams worth £501m. This is eight per cent more than in 2022, and represents 54pc of all claims made over the year. Insurers also identified 16pc more fake property insurance claims, worth £143m; and an estimated 583,000 fraudulent insurance applications, a 17pc increase from 2022. Application fraud is when important information is purposefully misrepresented or hidden for financial gain.
What they say
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.”
That free-phone line is run by Crimestoppers.
Case studies
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.
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 TV’s 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.
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. 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. 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.
