IFB wants higher levy to help in fight against fraud

Cash for crash has been a scourge of insurers. But the Insurance Fraud Bureau (IFB) has fought back against drivers who engineer crashes – with some success.

Last week, the ABI announced fraudulent claims had risen 14% to £840m. But insurers believe that criminals are looking for easier targets than motor and are turning to public (PL) and employers’ liability (EL) fraud.

Criminal gangs are reported to be hanging around schools and car parks to lure people into committing these types of fraud.

Allianz has created a specialist claims handling team for PL and EL fraud, and its fraud manager, Mihir Pandya, believes the insurer can save £10m this year as the new operation covers more cases of liability fraud. Now the IFB wants to fight back – and wants an increase in its levy.

Chairman David Neave says the IFB will put forward plans for a levy increase to fight organised motor, but also rising liability, crime.

The IFB budget will draw up its budget and the ABI general insurance committee will consider the increases for the 2011 budget before the year end.

Neave says: “There is a clear recognition in many parts of the insurance market that not only are we seeing an increase in fraud, but we need to make a stand in a number of areas.

“One possible way is to look at investing more money in the IFB to achieve a higher return, particularly in areas such as claims fraud, and particularly organised fraud in the motor spaces and also on the liability side. It is an option and it is an option that should be put to the market for 2011.”

Neave continues: “From my perspective, I would like to see that being taken forward. I would like to see the levy increase. Obviously, we are delivering a service on behalf of our members, so ultimately it will come down to the view of all of our members on that one.”