"It is also important that consumers remain vigilant to potential scams. The golden rule is never act in haste – if a deal appears too good to be true, then it probably is."
- Mark Allen, assistant director, head of fraud and financial crime at the ABI
The total number of fraudulent claims detected has fallen by 19% on 2021. Of the 72,600 cases detected, the number of opportunistic frauds decreased by 18% to 63k cases. Amongst these fraudulent claims, one claimant stood to pocket £75k in a travel insurance scam, while another claimant made £50k by selling fake motor insurance.
While these findings could suggest that the industry’s warnings about the “grave consequences” of committing fraud may have deterred some people, the ABI has said that this reduction must be viewed in the context of market developments. For example, there has been a 20% fall in the volume of fraudulent personal claims, largely as a result of the Official Injury Claim (OIC) portal reducing the overall number of small personal injury claims being made. Whereas, motor insurance continues to make up the largest volume of fraud cases, representing 59% (42,500) of the total insurance claim fraud.
The ABI believes that this reflects the government’s aim of introducing a simplified, fairer, more efficient, and cost-effective compensation system.
Commenting on these findings, Mark Allen, assistant director, head of fraud and financial crime at the ABI, has said:
“While it is good to see the industry’s collaborative efforts deliver results in 2022, there can be no room for complacency. With many households and businesses continuing to face rising costs, now more than ever honest customers expect insurers to weed out the cheats and focus on paying genuine claims as quickly as possible.
“Fraud is now the most reported crime in England and Wales. As financial hardship increases, previously honest customers could be tempted to ‘act in the moment’ to exaggerate claims. These latest figures highlight that some fraudsters are aiming big, with some large frauds uncovered. This shows why there can be absolutely no let-up in pursuing insurance fraudsters. Honest customers rightly expect nothing less.”
Detective Chief Inspector Tom Hill, from the City of London Police's Insurance Fraud Enforcement Department (IFED), said:
"Whilst it is positive to see that detected insurance fraud rates fell in 2022, the increase in the average value of fraud shows that both IFED and the insurance industry cannot afford to take our foot off the pedal when it comes to uncovering and disrupting fraudsters."
"Insurance fraud is never simply taking money from a company that can afford it. Many victims of insurance fraud are members of the public, from people who have their identities stolen to help facilitate fraud, to people who have unknowingly bought fake motor insurance from ghost brokers."
Ursula Jallow, director at the Insurance Fraud Bureau (IFB), added:
“ABI’s new figures show that our determined efforts to prevent fraud are clearly making an impact, but we can’t let our guard down now. Insurance scams are widespread across the UK, and fraudsters are using increasingly sophisticated tactics to prey on vulnerable people and businesses.
"We're committed to our collaboration with insurers, police and government, to help bring all fraudsters to justice. The consequences are serious. Those who deliberately lie on an insurance application or claim will be put on the Insurance Fraud Register (IFR), which can deny them access to essential insurance services for years to come. Fraudsters also face a potential criminal conviction and imprisonment.”