Insurance fraud costing £1.6 billion a year

Source: Exec Digital UK

Date :18/10/2007 17:00:24

A rise in the number of fraudulent insurance claims is costing the industry an estimated £1.6 billion a year according to the industry's trade body.

The Association of British Insurers (ABI) said that even though increased efforts by firms had boosted the number of bad claims spotted and stopped, between March 2006 and March 2007, one in every eleven claims were still “in some way fraudulent”.

In around 85 percent of cases, the genuine loss of the goods was being inflated.

The ABI said past research suggested that some people regarded making false claims as an "acceptable crime" because other people were doing it.

Scams

Nearly half of the detected fraud was on household insurance policies, with the scams exposed including deliberate damage done to carpets and then claimed for.

Typical scams include someone deliberately damaging a carpet and then claiming it was caused accidentally.

However, “The industry is fighting back.” Nick Starling(pictured), Director of General Insurance and Health at the ABI, said.

“Insurance cheats are more likely to be caught than ever before. And cheats will pay a high price as future insurance and credit will be more expensive and harder to obtain."

October 18 2007

Related Links

Association of British Insurers