Fraudulent insurance claims fell in number but rose in value last year, costing the insurance industry £1.3bn in total, an Association of British Insurers (ABI) report has shown.
The report, published this week, found more than 500,000 insurance frauds were detected last year, of which 113,000 were fraudulent claims and 449,000 dishonest insurance applications. This represents an 8% fall in number of fraudulent claims but one per cent rise in value.
A bodybuilder claimed £150,000 for back injuries but was rumbled when he was filmed doing a press-up challenge. Two fraudsters staged a collision but appeared uninjured until the ambulance arrived, when they feigned injuries. A cyclist claimed £135,000 after hitting a pothole, but evidence showed the accident happened at an entirely different location. The cyclist was sentenced to three and a half years in prison.
A specialist police unit targeted staged motor accidents and other organised frauds, which have now fallen by one-fifth on 2016 numbers to £158m in total value. However, slightly more fraudulent motor insurance claims were detected overall, 67,000, with a 4% rise in value on 2016 to £775m.
Miles Hepworth, member of the Joint Fraud Sector Focus Team at the Forum of Insurance Lawyers (FOIL), said: ‘As always the real beneficiaries are those ancilliary parties behind the claimant who are layering the claims.
‘There is a real need for the process to be reformed to allow for more disclosure and visibility around claims farmers and the sourcing of claims as well as more robust regulation of claims management companies. Since the advent of fixed fees we have seen the rise of psychological injuries and rehabilitation charges being added to most personal injury claim which may well account for the rise in value as this in turn pushes up the costs.’
Hepworth, who is a partner at DWF, said the report demonstrated the ‘tenacity’ of fraudsters.
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