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Rise in Insurance Fraud Detection
The latest report published by the Association of British Insurers has highlighted the growing cost of insurance fraud. Undetected insurance fraud is now estimated to cost £1.9billion a year, which equates to a 24% increase on figures released 2 years ago.
This figure equates to an extra £44 a year on every household’s general insurance, although ironically, the ABI reports that more and more people are being caught lying or withholding information in order to get cheaper insurance.
The ABI also commissioned research into attitudes towards insurance fraud and found that 16% of people would not rule out making an exaggerated insurance claim, and 44% of people think it is acceptable to overstate the value of items they are claiming for.
However on a more positive note, the insurance industry is now able to detect 30% more fraud than previously, saving £730 million in detected and prevented insurance fraud.
The ABI lists reasons for the increase which include the wider introduction of dedicated fraud teams and the increasing use of commercially available databases and solutions. 192business and Admiral Insurance group have recently produced a case study showing how such systems can prevent insurance fraud.
Nick Starling, the ABI’s Director of General Insurance and Health commented further in the increased detection of insurance fraud, saying: “There is no hiding place for insurance cheats. Honest customers should not have to pay for the fraudsters. The tough approach taken by insurers to protect honest customers means that they are detecting more of the fraud committed. Closer scrutiny of proposal forms and claims, as well the exchange of information through industry-wide databases, is tightening the net on the cheats.”
The full report is available at:http://www.abi.org.uk/Media/Releases/2009/07/40569.pdf
You can read the full Admiral insurance case study here.
6th August 2009
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