Figures from ABI issued today (26 July) reveal that in 2012:
Insurers detected 124,292 bogus or exaggerated insurance claims, the equivalent of 2,390 a week. The value of these frauds was £1.1 billion or £21 million uncovered every week.
Home insurance frauds were the most common with 51,000 detected worth £95.5 million.
Dishonest motor insurance claims were the most costly, with savings of £614 million made from the 42,700 dishonest claims made under personal and commercial motor policies.
The value of frauds uncovered nearly doubled between 2007 - 2012, with the number of frauds detected up by over a third in the same period.
In addition, the City of London Insurance Fraud Enforcement Department (IFED), the specialist police unit dedicated to tackling insurance fraud across England and Wales has investigated millions of pounds worth of insurance scams, making hundreds of arrests and securing a growing number of convictions.
The Insurance Fraud Bureau (IFB), an industry-funded organisation tasked with disrupting organised motor insurance fraud, is currently assisting Police forces across the UK to investigate over 60 criminal gangs, with the total value of scams under investigation tipping the scales at over £75 million.
Nick Starling, ABI's Director of General Insurance, said:
"There will be no let-up in the industry's zero-tolerance approach to insurance fraud. Honest customers rightly expect nothing less. Never has it been harder to get away with insurance fraud, never have the penalties – such as getting a criminal record and being unable to get future insurance and other financial products – been tougher.
"The impact of the Insurance Fraud Enforcement Department, the development of the Insurance Fraud Register and the work of insurers own fraud investigation teams underline our determination to deter potential cheats and come down hard on anyone who thinks making a fraudulent claim is 'easy money'.”
Examples of insurance cheats exposed include:
A man was caught on camera playing rugby while trying to claim nearly £1 million in damages for a workplace accident. He was jailed for eight months for exaggerating his injury.
A women who falsely claimed she was left severely disabled and unable to work following a motor accident received a prison sentence, as did her husband and daughter who supported her deceit.
A woman provided her insurer with a photo of a watch she said had been stolen. However, the photo was discovered to have been taken a few weeks after the alleged theft.
Following an accident involving a bus, 34 passengers made personal injury claims – more than the maximum number of people the bus could carry. It was discovered that one of the passengers worked for a claims management company who had persuaded passengers to falsify their injuries.
A man was caught making a bogus compensation claim using images of a wound downloaded from the internet to support his £500 claim.
A customer submitted invalid receipts for four mobile phones and several laptops kept in a bag he said had been stolen while travelling through Heathrow Airport.