One scam every minute – ABI reveals true extent of insurance fraud in the UK

From lying when applying for cover to making a dishonest claim, a conning cyclist, bogus body builder and bus crash scammers were among those caught out.

The Association of British Insurers’ most comprehensive analysis yet into insurance fraud published today, for the first time includes data on application fraud - where details such as age, address, or claims history are deliberately mis-stated.

The figures highlight that in 2017:

A total of 562,000 insurance frauds were detected by insurers. Of these there were 113,000 fraudulent claims, and 449,000 dishonest insurance applications.

The number of dishonest insurance claims, at 113,000, were valued at £1.3 billion. The number was down 8 per cent on 2016, while their value rose slightly by 1 per cent. The fall in number reflects the industry’s collaborative work in detecting and deterring fraud.

The number of organised frauds, such as staged motor accidents, fell 22 per cent on 2016, with frauds worth £158 million detected. This reflected the work of the Insurance Fraud Bureau (IFB), who are currently investigating a rising number of suspected frauds, and the Insurance Fraud Enforcement Department (IFED). IFED is the specialist police fraud unit investigating insurance fraud, such as staged motor accidents and illegal insurance advisers (so-called ghost brokers). Since its formation in 2006, IFED has secured over 400 court convictions for insurance fraud.

The value of fraudulent detected motor insurance claims, at £775 million, rose by 4 per cent on 2016. The number of these frauds, at 67,000, showed a small rise.

Fraudulent property insurance claims fell. The number detected dropped by 11 per cent on 2016 to 22,000, with a value of £100 million.

Insurers detected 449,000 cases of confirmed or suspected application fraud, where people lied or withheld information to try and get cheaper cover. Motor insurance made up the bulk of dishonest applications, with typical lies including the nature of the applicant’s occupation, and driving record, where previous claims and motoring convictions were not disclosed.

“We don’t underestimate the challenge we face; insurance fraud is an issue that the industry takes very seriously and has been investing heavily in combatting in recent years. 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.”