Detected insurance fraud drops - ABI

Fraud detected by insurers fell by 5% in terms of the number of claims and 3% in terms of the value in 2016, according to new statistics from the ABI.

Insurers detected £1.3bn of fraud in 2016, and 125,000 dishonest claims, the new stats show.

The level of organised fraud fell 30% compared with 2015 levels, with 15,000 frauds valued at £174 million detected. The ABI said the fall in organised fraud reflects the work of the Insurance Fraud Bureau (IFB) and the City of London Police’s Insurance Fraud Enforcement Department (IFED) in exposing crash for cash staged motor accidents, and other organised frauds, such as criminals offering fake motor insurance.

The number of detected motor frauds fell 4% to 69,000, while the value fell 5% to £780m. The ABI said the reduction in organised frauds contributed to this.

But it added that here was a slight rise in the number of opportunistic motor frauds to 57,000 from 54,000. The ABI said opportunistic fraudsters are generally law-abiding citizens but are often encouraged to file claims by “disreputable” claims management companies.

Property insurance fraud numbers fell 4% to 26,000, while the value fell 2% to £106m.

ABI director of general insurance policy James Dalton said: “The vast majority of insurance claims are genuine, with millions being paid to customers every day. The industry does everything it can to keep premiums down and tackling fraud, which drives up prices for honest customers, is at the heart of that. So it’s great to see we have achieved real success in tackling organised fraud in the last year.”

IFB director Ben Fletcher said: “These reductions reflect the general trend that we have seen in organised motor scams and is a welcome reflection of industry efforts to tackle the problem year on year.

“The reality however is that £1.3bn of fraud is still far too high and therefore the industry and government need to continue to work on ways to reduce the level of fraud further.”

IFED head detective chief inspector Oliver Little added: ”The successful and strong relationship between the City of London Police’s Insurance Fraud Enforcement Department (IFED) and the ABI can be seen by these figures. This is a fantastic example of IFED working closely with the insurance industry to ensure that consumers are protected from such claims and perpetrators are brought to justice.