“No room for complacency” warns ABI on insurance fraud decrease

The figures highlight that, in 2021 (when compared to 2020): 

*At 89,000, the number of fraudulent claims detected fell by 5% to their lowest level since 2007. Standing at £1.1 billion, their total value dropped by 2% to the lowest level since 2012  

*Motor insurance claim frauds continued to be the most common, albeit that last year witnessed a drop in their total volume and value. There were 49,000 frauds detected, which is down 7%, although their value (at £577 million) fell by only 1%. The number of organised motor frauds uncovered (ie 10,617) rose by 8%. At least in part, this escalation reflects initiatives by the Insurance Fraud Bureau designed to tackle ‘crash for cash’ staged motor scams

*While the number of property insurance frauds dropped to 18,000 compared to 24,000 in 2020, their value rose to £124 million (up 9%). This was driven by a rise in the value of commercial frauds uncovered. 

*At 12,978, the number of fraudulent liability insurance claims uncovered dropped by 10%. Their value – recorded at £378,000 – fell by 8%

Premiums paid

Mark Allen, the ABI’s chief fraud and financial crime officer, said: “Insurers continue to work hard to pay legitimate claims as soon as possible. With many households battling the cost of living crisis, more than ever it’s the case that honest customers rightly expect there to be no let-up in the industry’s clampdown on insurance fraud, the costs of which end up being absorbed in the premiums paid by all customers.”

Allen continued: “The fall in reported insurance fraud reflects the industry’s sustained counter fraud investment and collaborative approach, but no-one can lower their guard against the cheats. Fraudsters thrive in hard times, preying on the vulnerable. We urge everyone to be vigilant to the threat of financial scams, including those carried out online. The golden rule is that if a deal looks too good to be true, then it probably is. Anyone with suspicions should check the credentials of whom they are dealing with to ensure they’re genuine. If a fraudulent insurance claim is suspected then it’s best to alert the free and confidential Insurance Cheatline run by the Insurance Fraud Bureau.”

Ben Fletcher, director at the Insurance Fraud Bureau, added: “The insurance industry is working harder than ever to stop fraudsters in their tracks. The reported fall in scams seen in 2021 is a great reflection of these efforts. While we welcome this positive progress, fraud levels are still far too high and countless innocent people sadly continue to be targeted by devastating insurance scams. We must do more to fight fraud.”

Further, Fletcher noted: “Every day, we’re working in partnership with insurers and the police service to investigate suspicious activity and bring fraudsters to justice, but we also need the assistance of the public. If anyone has evidence of insurance fraud, we encourage them to report it to our free confidential Cheatline at insurancefraudbureau.org or otherwise call 0800 422 0421.”

Disrupting criminality

Detective Inspector Andrew Thompson from the City of London Police’s Insurance Fraud Enforcement Department (IFED) said: “While it’s positive to hear that detected insurance fraud rates fell in 2021, both the IFED and the insurance industry cannot afford to take the collective foot off the pedal when it comes to disrupting and uncovering these crimes.”

Thompson concluded: “We have a bumpy road ahead of us, with a predicted rise in fraud due to the cost of living crisis driving people to find other means of financial gain. The need for solid partnership working between the law enforcement community and the industry is now more important than ever to prevent an epidemic of insurance fraud.”