UK Insurers Hit with over 2,300 Fraudulent Claims Every Week

July 26, 2010

The UK’s insurers are detecting more fraudulent insurance claims than ever according to figures released by the Association of British Insurers. The ABI said that insurers had received over 2,000 dishonest insurance claims every week in 2009, worth more than £16 million [$25 million].

The ABI summarized the figures for 2009 as follows:
— 122,000 fraudulent insurance claims were uncovered, up 14 percent on 2008. The value of these claims, at £840 million [$1.3 billion], rose by 14 percent on the previous year.
— Motor insurance frauds were highest by value, with dishonest claims totaling £410 million [$635 million] uncovered.
— The most common frauds involved home insurance, with 62,000 bogus or exaggerated claims detected.
— 4 percent of all claims by cost were fraudulent. This is similar to 2008, although double the figure of five years ago.

Many of the 8,500 dishonest liability claims exposed involved bogus personal injuries. As examples of some of the frauds the ABI noted the following:
— A man claimed he had fractured his hand after falling over a pothole in the street, when in fact he had sustained the injury after he punched a wall during a domestic dispute.
— A young woman claimed to have tripped over a loose pavement, when in fact her injuries were actually sustained from jumping down a flight of stairs while running away from security guards on suspicion of shoplifting.
— Head injuries allegedly sustained by falling over, were in fact sustained after being hit on the head by a baseball bat during a fight.

Nick Starling, the ABI’s Director of General Insurance and Health, commented: “Reducing fraud remains an ongoing battle for the insurance industry. Our honest customers rightly object to having to pay higher premiums to subsidies 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.”

Source: Association of British Insurers

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