Industry News
UK Insurance fraud hits record levels
New figures, revealed by the Association of British Insurers (ABI), show that the insurance industry turned down a record 122,000 insurance claims during 2009, an increase of more than 14%. In fact, 4% of all insurance claims were bogus.
The increase could be due to an increase in fraud, or better detection of fraud by the industry. The ABI says the insurance industry has got better at detecting false claims. There's even a special Insurance Fraud Bureau, known as the IFB, set up to help identify such fraud and pursue prosecution of offenders.
Nick Starling, Director General of Insurance and Health at the ABI commented that "reducing fraud remains an ongoing battle for the insurance industry. Our honest customers rightly object to having to pay higher premiums to subsidise the fraudulent minority, which is why insurers continue to up their game in the war on the cheats.
"Whether claiming against a third party for bogus personal injury or on their own insurance, fraudsters are more likely than ever to get caught, leading to more expensive and harder to obtain insurance and credit, and the possibility of a criminal record."
Either way, fraudulent claims totalled £840m last year. That means there were 6,000 dishonest claims, worth a huge £16m every week for the year. The impact of this is felt most by the majority of the population who are paying, on average, £44 more for their annual insurance costs as a result.Nearly half of all fraudulent claims are made on car insurance, where insurers uncovered £410m worth of false claims. The impact on the insurance industry itself, let alone their customers, is huge. Figures by the AA, quoted in Management Today, estimate that for every £1 paid in insurance premiums, £1.22 is paid out, whilst the Telegraph newspaper claims that, average quoted premiums have risen by over 30 per cent.
To find out more about insurance fraud, contact the Association of British Insurers, or visit the IFB website: www.insurancefraudbureau.org.
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