Insurance Fraud Thrives in Downturn

Figures released today show that almost 2000 fraudulent insurance claims are being uncovered every week.

Statistics released by the Association of British Insurers (ABI) show that 107,000 fraudulent claims were undercovered in 2008; a 17% increase on last year’s numbers.

Dishonest home insurance claims were the most common insurance fraud uncovered, whilst motor insurance claims account for the highest value, totaling £360 million.

The 2008 figures mean that 4% of every insurance claim filed is fraudulent, however research carried out by the ABI suggests that 1 in 5 people would not rule out making a fraudulent insurance claim.

192business already helps prevent insurance fraud by helping firms check for address and location inaccuracies identify claimants using stolen identities, or non existent 3rd parties who have been cited in fraudulent claims.

The table below details show how much insurance fraud costs, by type of fraud, and puts the total cost at £730million.

Nick Starling, the Director of General Insurance and Health at ABI, explained the impact of the latest figures, saying:

“Fraud thrives in a recession, so insurers are intensifying their crackdown on insurance cheats. Fraud adds an extra £40 a year to the average premium, which is why the harder we make it for the cheats; the more competitive premiums will be for honest customers.

Class of Insurance   Number of frauds detected   Value of frauds detected

                                  (estimated)                          (estimated)
Motor                         35,300                                    £360 million
Household buildings  55,400                                    £110 million
and contents

Travel                          4,300                                    £5 million
Creditor                      2,500                                     £19 million
Commercial                 9,800                                     £240 million
Total                           107,200                                 £730 million

The full report can be found at: http://www.abi.org.uk/