Zurich finds surge in fraudulent property insurance claims

In the last two years, fraudulent property insurance claims have spiked by 88%, making them a “hot spot” for fraudsters.

Zurich’s new data, published yesterday (11 March 2024), analysed fraud data in the UK from 2021 to 2023, uncovering and addressing 482,906 detected property fraud claims during that period.

In 2023 alone, Zurich detected and prevented £78.5m of fraud – a 12% year-on-year increase equivalent to an additional £8m fraud saving.

The insurer’s findings also showed a significant surge in property claims investigations, with more than double the number of inquiries in December 2023 compared to 2022.

In total, 906 property claims were referred for investigation in 2023, marking a substantial 44% rise from 2022.

However, despite the nearly doubled volume of claims, the average amount per fraudster stands at £19,582,

Scott Clayton, head of claims fraud at Zurich, said: “It’s clear that every year fraudsters are becoming more sophisticated, sometimes executed by highly organised criminal gangs.”

Crime

YouGov findings, released by the Insurance Fraud Bureau (IFB) last year (5 July 2023), identified a trend among young adults to turn to insurance fraud during the cost of living crisis.

The survey revealed that one in four young adults expressed that they would consider insurance fraud if facing financial struggles, marking a notable increase from the previous year’s results.

In 2023, 27% of 18 to 24-year-olds surveyed admitted they would contemplate providing false information on insurance applications to alleviate financial burdens, compared to 21% in 2022.

Detective chief inspector Tom Hill, from the City of London police’s insurance fraud enforcement department (Ifed), said: “As food, energy and fuel bills remain high, we understand that exaggerating or fabricating a property insurance claim can seem like a quick way to make money.  

“But pursuing a fraudulent insurance claim has very real consequences. It can make it harder to secure insurance in the future and even result in a criminal conviction.  

“Insurance fraud pushes up the cost of premiums for everyone, which means that honest customers end up paying the price. We’re continuing to work closely with the insurance industry to help root out fraud and welcome Zurich’s work to detect fraudulent claims.” 

In response to evolving fraud patterns, Zurich has employed data analytics, such as its Carpe Data system, to screen personal injury claims by cross-referencing them with online data for signs of suspicious activity.

Clayton said: ”Whilst there isn’t a silver bullet, it’s important for every insurer to keep pace by using the latest detection technology, alongside human intervention, in order to combat fraud and protect the honest customer.”