Insurers saw a slight fall in the number and cost of fraudulent insurance claims detected in 2016, according to industry figures from the Association of British Insurers (ABI).
The number and value of detected motor frauds fell, at 69,000, down 4pc on 2015; and £780m, down 5pc respectively. The reduction in organised frauds, such as crash for cash scams, contributed to this reduction, says the ABI. However, it reported a small rise in opportunistic motor insurance frauds.
While the overall number of opportunistic frauds detected at 110,000 remained unchanged on 2015, there was a rise in opportunistic motor insurance frauds uncovered – 57,000 compared to 54,000 in 2015. The ABI described such opportunistic fraudsters as generally otherwise law-abiding citizens. The ABI claimed that they are often encouraged by disreputable claims management companies, as seen by the resurgence in whiplash-style claims reported to the Government’s Compensation Recovery Unit. And property insurance frauds showed a slight fall. The number dropped 4pc on 2015 to 26,000, and their value fell 2pc to £106m.
The insurance trade body pointed out that insurance scams are carried out by criminal gangs that can put the lives of others at risk, and have links to more serious organised crime, such as money laundering and human trafficking. James Dalton, the ABI’s Director of General Insurance Policy, said: “The vast majority of insurance claims are genuine, with millions being paid to customers every day. The industry does everything it can to keep premiums down and tackling fraud, which drives up prices for honest customers, is at the heart of that. So it’s great to see we have achieved real success in tackling organised fraud in the last year.
“Opportunistic fraud has shown a small rise as people continue to be pestered by disreputable claims management firms that are helping fuel the compensation culture. This makes it imperative that the Government tightens regulation of claims management companies, and presses ahead with its further reforms on whiplash, so we are pleased to see this much-needed reform in the Queen’s Speech.”
Ben Fletcher, Director of the Insurance Fraud Bureau (IFB), said: “Fraud is harmful in a number of ways, including the real and present physical risk posed day in and day out to road users, alongside the financial impact on individuals and business alike. These reductions reflect the general trend that we have seen in organised motor scams and is a welcome reflection of industry efforts to tackle the problem year on year. The reality however is that £1.3 billion of fraud is still far too high and therefore the industry and government need to continue to work on ways to reduce the level of fraud further.”
And the head of the City of London Police’s Insurance Fraud Enforcement Department, Detective Chief Inspector Oliver Little spoke of a successful and strong relationship between the IFED and the ABI. “Insurance fraud is taken extremely seriously and the consequences for those involved are severe. IFED will continue to work with the ABI to target those who carry out this activity.”
Among cases singled out by the ABI and police, a motorist was jailed for six months after he deliberately cut into a lane of cars queuing to get over the Seven Bridge. He later claimed that the victim had collided with him and that he had suffered a painful back injury. However, CCTV footage at the scene showed he had caused the accident. See video footage: https://www.cityoflondon.police.uk/advice-and-support/fraud-and-economic-crime/ifed/ifed-news/Pages/Man-who-caused-a-crash-and-then-blamed-it-on-the-other-driver-is-sentenced.aspx.
And for more on a crash for cash gang recently found guilty of fraud offences for deliberately causing a crash in Warwickshire; that brought the milestone 500th conviction for the Insurance Fraud Bureau, visit the IFB website.
