Motor insurance fraud up 10% since 2010

Motor insurance is the biggest area for fraudulent claims, up almost 10% over the past two years, research by Ordnance Survey and the Insurance Fraud Investigators Group (IFIG) has revealed.

The number of motor fraud claims jumped to 79% in 2012 from 72% in 2010, while 50% more insurance fraud investigators reported an increase in commercial motor claims compared to 2010. In personal injury, that number climbed 20% (42% in 2010 compared to 53% in 2012).

Fraudulent claims ranged from inflated and exaggerated claims (83%), to completely false claims (75%) and serial claimants (55%). 

Seventy-nine percent of investigators also believe that aggregators and brokers need to do more to prevent fraud at policy inception, including undertaking more stringent checks, undertaking identity checks when signing up customers, and enabling better information sharing.

The survey found that fraudulent claims being fuelled by the recession continued to be the top concern among investigators this year.

Eighty percent of those surveyed said an increase in fraud, driven by the economic downturn, was a major worry.

Fraud investigators said fraudulent claims were already on the rise, with almost four in five (79%) seeing an increase in fraudulent claims since the beginning of the year.

In light of this, insurers are increasing the number of measures they are taking against fraudulent claims.

Fraud has moved up the agenda for more than two-thirds (70%) of investigators, and more than 75% have seen increased investment in fraud detection within their organisation. This investment has been spent primarily on human resources (70%), combined with fraud detection systems (64%). 

Insurance Fraud Bureau director Phil Bird said: “Insurers invest £200m-plus per year in their anti-fraud staff and systems. Those investments saved more than £900m in claims payments in 2011.”

Eighty-three percent of insurance fraud investigators use geographic information in their investigations, with almost half (43%) using it to build up evidential cases for prosecution. 

Ordnance Survey financial services sector manager Sarah Adams said: “Fraud 2012 provides clear evidence that the industry takes this threat seriously, with increasing numbers of counter-fraud professionals using geographic data as an added tool in their armoury.”