New data released by the Association of British Insurers (ABI) shows that fraudulent insurance claims rose by nearly 10% in 2010 compared with the previous year. On average, this cost the industry £18 million every week – a reflection, perhaps, of the current economic climate.
133,000 bogus claims were discovered by investigators. The majority (66,000) were home insurance claims, with 40,000 fraudulent motor insurance claims also being uncovered.
Glen Marr, director of the Insurance Fraud Bureau, said “fraudsters continually look for new ways to con insurers, so we are upping our game.” Nick Starling, director of general insurance and health at the ABI, said that more rigorous surveillance measures are being introduced, adding that a national Insurance Fraud Register will be created next year. A national police unit responsible for investigating insurance fraud is also set to be launched in 2012.
There are a wide variety of ways in which fraudulent claims can be identified, and the Internet has definitely proved to be an important tool for investigators. One person tried claiming for back injuries sustained whilst working in a nightclub, but images on their Facebook profile showed them performing gymnastics. Sometimes, more conventional methods are used to catch people out – a claim for facial injuries said to have been caused by a falling toilet roll holder at a fast food outlet was rejected because the equipment would have had to have defied gravity and fallen upwards to cause the injury that was reported.
The annual cost of insurance fraud is estimated to be £2 billion by the ABI. As a result, UK policyholders are paying an additional £44 a year on average to make up the shortfall.