Home Office launches ‘major new crackdown’ on insurance fraud

The government’s Home Office has launched a “major new crackdown” on insurance fraud today (25 October 2024) with the launch of a new Insurance Sector Fraud Charter. 

A statement from the government department explained that insurance firms had reached a “voluntary agreement” to identify and address loopholes, enhance collaboration and improve victim support at the latest meeting of the Joint Fraud Taskforce.

The taskforce brings together government departments, law enforcement, regulators and representatives from the private sector and victim groups. 

The new voluntary charter has been designed to identify loopholes in the insurance market that fraudsters can take advantage of.

Current signatories include the ABI, Biba, Lloyd’s, the International Underwriting Association (IUA), the Lloyd’s Market Association and the London and International Insurance Brokers’ Association, as well as the government. 

These companies have signed up to pledges that include supporting the National Crime Agency’s National Assessment Centre to carry out a review of the professional enablers of fraud in the insurance sector and identifying policies being exploited by ghost brokers.

Members of the charter will also review the tactics and websites being used by fraudsters to promote bogus insurance offers. 

Industry priority

This new commitment from the Home Office follows recent statistics from the ABI, which showed that more than £1bn of fraudulent insurance claims were detected across the insurance sector in 2023 – a 4% year-on-year increase.

Published earlier this year (25 September 2024), the stats also revealed that an average of 230 bogus claims were detected every day.

Commenting on the launch of the government’s crackdown and charter, ABI director general Hannah Gurga said: ”Insurance fraud remains an ongoing threat that corrodes trust in society and undermines our economic prosperity.

“Tackling insurance fraud is an industry priority and requires a collaborative approach between private and public sector. We’re delighted to have agreed the Insurance Sector Fraud Charter with the Home Office, boosting the industry’s resilience and ability to fight fraud.

In its statement, the Home Office also noted the growing prominence of crash for cash scams, calling the trend ”a significant issue” that places “innocent lives at risk”. Insurance Times recently investigated this fraud typology, speaking to Marek Coghill, detective inspector and the officer leading the City of London Police’s Insurance Fraud Enforcement Department’s (Ifed) response to it.

Lord David Hanson, minister of state at the Home Office with responsibility for fraud, added: ”Fraud is an appalling crime and we are determined to crack down on these callous criminals.

“Not only do honest customers face higher insurance premiums but these fraudsters do not care if people are harmed in the pursuit of profit. This charter is an important step, and we will continue to work with industry and law enforcement to better protect the public from fraud.”