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UK insurance fraud rises to £1.3bn


The UK saw the cost of fraudulent insurance claims rise to a record £1.3 billion in 2013, an increase of 18 percent on the previous year.

According to figures published by the Association of British Insurers, despite a small fall in the number of detected frauds, their value increased.

Insurers reported a total of 118,500 bogus or exaggerated insurance claims, equivalent to 2,279 a week. The average fraud detected across all types of insurance products was £10,813.

Fraudulent motor insurance claims were the most expensive and common, with the number of dishonest claims at 59,900 claims, an increase of 34 percent from 2012 and their value at £811 million up 32 percent.

The number and value of property insurance frauds fell to 35,000 frauds worth £137 million. These figures represent falls of 38 percent and 24 percent respectively on 2012.

The value of dishonest general insurance claims detected has more than doubled since 2007, with the number detected up 30 percent over the same period.

The association also reported that investigations by the Insurance Fraud Enforcement Department, a specialist police unit dedicated to tackling insurance fraud, have so far led to 470 arrests and 85 prosecutions of insurance fraudsters since it was established in 2011.

Aidan Kerr, the ABI’s assistant director, head of fraud, said: "The vast majority of customers are honest and rightly expect tough action against the fraudsters. Insurance fraud is not a victimless crime, which is why the industry invests £200 million a year in fraud detection, including funding the Insurance Fraud Enforcement Department, and developing the Insurance Fraud Register, a central database of known insurance cheats. The more that is done to crackdown on the dishonest, the quicker and more effectively insurers can deal with the claims from the honest majority.

"The message is clear: never has it been harder to get away with committing insurance fraud; never have the penalties - ranging from a custodial sentence and a criminal record to difficulties in obtaining financial products in the future – been so severe.”

Association of British Insurers, Fraud, Europe, Aidan Kerr,

Intelligent Insurer

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