"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 & Financial Crime at the ABI
In 2023, the Association of British Insurers (ABI) detected 84,400 fraudulent claims – up 16% on 2022 – with an average value of £13k. For the first time, the ABI’s latest figures also include details on the type of fraud scammers attempted to commit. Notably, exaggerated loss was the most popular type of fraud, accounting for 25,700 claims valued at £407mn.
Although motor insurance continues to be the market where insurers see the most fraudulent claims (45,800 motor scams in 2023), there’s been a striking 16% rise in fraudulent property insurance claims, worth £143mn.
Overall, insurers prevented approximately 583k fraudulent insurance applications which is a 17% improvement on the year prior – application fraud is when important information is purposefully misrepresented or hidden for financial gain.
Discussing case studies, the industry body highlighted several scam strategies exposed, of which a man convicted of pocketing £200k, by selling over 900 fraudulent motor insurance policies, was included.
“Insurance is there to protect people and businesses should the worst happen. It’s encouraging to see that the industry’s efforts to detect and prevent people from abusing this are working, but there can be no let-up in pursuing insurance fraudsters. Fraud doesn’t just impact victims that fall foul of the scammers, it affects everyone that pays for an insurance policy – with bogus claims pushing up the cost of premiums for all,” explained Mark Allen, Assistant Director, Head of Fraud & Financial Crime at the ABI.
He said: “That’s why cracking down on fraud continues to be a top priority for our industry. Consumers also need to remain vigilant to potential scams, and our latest online fraud campaign aims to help everyone learn how to protect themselves in an increasingly digital world.
“The golden rule is never act in haste – if a deal appears too good to be true, then it probably is. If you suspect fraud has been committed, you can report it confidentiality to the IFB’s CheatLine,” Mark added.
Ursula Jallow, Director of the Insurance Fraud Bureau (IFB), stressed “It’s never been more important to raise awareness about the impacts of insurance fraud. Whether it’s raising awareness with those who’re thinking of making an exaggerated fraudulent claim or raising awareness with members of the public who could be the victim of an insurance scam.
“We’re collaborating closely with insurers, law enforcement agencies, and industry bodies to ensure that we protect the public from insurance fraud and scams as these can be devasting, financially, socially, and psychologically.”
Detective Chief Inspector Tom Hill, from the City of London Police’s Insurance Fraud Enforcement Department (IFED), concluded “Insurance fraud is not a victimless crime. It increases the cost of premiums for honest customers, while fraudsters who sell fake car insurance or deliberately cause road traffic collisions to claim compensation put innocent motorists at risk.”
