Insurance fraud tops £1bn a year

The value of fraudulent claims uncovered by insurers has topped £1bn a year for the first time, according to the ABI.

Figures issued today reveal that in 2012, insurers detected 124,292 bogus or exaggerated claims, the equivalent of 2,390 a week, with a total value of around £1.1bn or £21m a week.

Home insurance fraud has emerged as the most common, with 51,000 fraudulent claims detected, worth £95.5m, but motor fraud remains the most costly, with savings of £614m made from the 42,700 dishonest claims in both personal and commercial lines motor policies.

The value of fraud has been found to have almost doubled between 2007 and 2012, while the number of frauds detected has risen by more than a third in the same period.

ABI director of general insurance Nick Starling said: “There will be no let-up in the industry’s zero-tolerance approach to insurance fraud. Honest customers rightly expect nothing less. Never has it been harder to get away with insurance fraud, never have the penalties – such as getting a criminal record and being unable to get future insurance and other financial products – been tougher.”

In addition, the City of London Insurance Fraud Enforcement Department (IFED), has made hundreds of arrests and secured a growing number of convictions as more insurance fraud has been uncovered.

The Insurance Fraud Bureau (IFB) is also assisting police forces across the UK to investigate more than 60 criminal gangs, with a total value of fraud under scrutiny standing at more than £75m.

Starling added: “The impact of the IFED, the development of the Insurance Fraud Register and the work of insurers’ own fraud investigation teams underline our determination to deter potential cheats and come down hard on anyone who thinks making a fraudulent claim is ‘easy money’.”