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Insurance Fraud & Shoplifting

The value of fraudulent insurance claims uncovered by insurers rose to a record £1.3 billion in 2013 – that is up 18% on the previous year, according to figures issued by the ABI. Amazingly, this figure is more than double the cost of the UK’s shoplifting bill! So do we conclude that insurance fraud is a premeditated crime, whilst shoplifting is a spur of the moment crime, or do we decided that at major level, both these crimes are planned, implemented and carried out with a degree of bravado that honest people somehow can’t achieve?

Whilst there has been some impressive clean up statistics with insurance fraud statistics, latest industry figures show just how enormous the problem is – and just looking at the sums involved, it is easy to see why insurance is an expensive commodity for the honest person.

  • Insurers detected a total of 118,500 bogus or exaggerated insurance claims, equivalent to 2,279 per week. The average fraud detected across all types of insurance products was £10,813. Whilst there was a small drop in the number of detected frauds their value, at £1.3 billion, was up 18% on 2012.
  • Fraudulent motor insurance claims were the most expensive and the most common, with the number of dishonest claims at 59,900 claims up 34% on 2012 and their value at £811 million was up 32%.
  • The number and value of property insurance frauds fell on 2012: 35,000 frauds worth £137 million. These figures represent falls of 38% and 24% respectively on 2012.
  • Since 2007 the value of dishonest general insurance claims detected has more than doubled, with the number detected up 30% over the same period.

Cheats Beware!

Despite the horrendous statistics above, thanks to IFED and the IFB, things are not looking too rosy for the insurance criminals of the future:

  • Investigations by the Insurance Fraud Enforcement Department, a specialist police unit dedicated to tackling insurance fraud, has so far led to 470 arrests and 85 prosecutions of insurance fraudsters since it was established in 2011.
  • Calls from the public reporting suspected insurance frauds into the Insurance Fraud Bureau’s Cheatline rose by 32% to 606 in 2013 over the previous year.
  • The Insurance Fraud Bureau (IFB) was created in 2006 to specifically tackle organised cross industry motor insurance scams. Currently the IFB is supporting police forces and insurers investigate 110 ‘crash for cash’ scams, throughout the UK. These scams alone represent approximately £120 million of financial exposure to insurers.

Whilst the majority of people purchasing insurance are honest, there are those whose aim is to get something (and something more) for nothing! This is not a victimless crime, it is sneaky and mean and costs us all a great deal of money – and time. Money, because the insurance companies have to somehow fund this, and time because their staff are tied up assessing and dealing with claims which are completely spurious, which means law abiding folk wait longer for their legitimate claim to be dealt with.

So beware if you are thinking of ‘getting a little extra back’ – the IFED and IFB are waiting.........eager to see their success statistics grow: is it really worth taking a chance of getting a criminal record? Try saving up instead!

Contact Westhill Insurance Services, today.

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Posted on 24th June, 2014