Insurance
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Web of deceit Fraudulent motor claims may still be the biggest drain on insurers, but other sectors are starting to cause just as much concern, says Jonathan Head
Jonathan Head is a member of the Joint Fraud Sector Focus Team at FOIL (Forum of Insurance Lawyers) and a solicitor at Greenwoods
When insurance fraud is mentioned, what
mental image springs to mind? Given the recent focus on motor fraud it would hardly be surprising if the dominant picture were a male claimant wearing a cervical collar. That’s hardly unfair of course: the 2012 Insurance
Fraud Investigators Group (IFIG) report on insurance fraud noted that 40,000 bogus motor claims were made in 2012, many of them for whiplash, with nearly 80% of insurers reporting an increase in motor fraud. On the issue of whether the image of a male is
equally fair, no figures exist to show if men are more likely to be involved in motor fraud but recent research by AXA indicates that men are twice as likely as women to exaggerate a household claim.
Taking action The value of detected insurance fraud reached £1bn for
the first time in 2012, including £350m in professional ‘crash for cash’ scams, rising to £392m in 2013. Motor fraud accounted for just over 40% of total detected fraud costs in 2012.
44 /Claims Magazine/Issue 11/ With motor fraud causing the greatest losses
to the industry, and therefore to policyholders, it is understandable that the Government will be introducing measures this year to deter would-be fraudsters through improved medical evidence, increased data sharing and reforms intended to reduce the perceived incentives to make a fraudulent claim. Whatever the dominant image, of course, fraud does not stop at motor claims.
Growing concerns The most common fraudulent claim involves home cover, with 66,000 bogus or exaggerated claims made in 2012. In 2012, over 25% of insurers reported an increase in
household insurance fraud, encouraged in part by the economic situation and continued pressure on living standards. Even though the percentage of insurance fraud
perpetrated by policyholders dropped slightly in January 2013, it still amounted to around 70% of insurance fraud cases.
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