28 August 2019
  • Average insurance scam uncovered is now £12,000, but a fraudulent claim for £1.2 million exposed.
  • The number of detected insurance application and claim frauds up – 1,300 exposed every day.
  • Two fraudsters every week convicted of insurance fraud.

The lengths insurance cheats will go to try to con their insurer are laid bare today (28 August) as the ABI publishes its annual detected fraud figures. The total number of fraudulent claims and applications detected in 2018, at 469,000, rose by 3% on 2017, with their value up 6%. Every day, 1,300 insurance scams are uncovered, with the average con of £12,000. A preacher, a rock guitarist pensioner, and an award-winning hotelier were among the insurance cheats exposed.

During the last year, the equivalent of two cheats every week received a criminal conviction or a caution for insurance fraud. Cases investigated by the Insurance Fraud Enforcement Department, the specialist police insurance fraud investigation unit funded by the insurance industry, included sixteen people involved in a crash for cash crime gang who received a collective 33 years in jail sentences, and a man convicted of selling fake motor insurance who was jailed for two years.

Some insurance cons uncovered over the past year include:

Nothing staged about crash for cash gang’s sentences. The ringleader of an organised gang that staged motor crashes to con nearly £1.2 million from insurers was jailed for six years. Other gang members also received jail sentences totalling nearly 33 years.

Burst pipe gang get a soaking. A criminal gang made fake claims of nearly £1 million for damage and lost earnings from restaurants they said had been flooded by burst water pipes. It turned out that they had deliberately smashed the water pipes and that the restaurants had never been open for business. The five men were jailed for a total of 14 years.

Ghost broker gets a real sentence. A man who sold fake motor fleet insurance policies to cover 70 vehicles was jailed for two years.

Praying for a payout. A preacher, and self-styled bishop, was jailed for 10 months when found guilty of staging a motor crash. He fraudulently bought motor insurance using another person’s details, then contacted the insurer saying he had crashed the car into another vehicle. It turned out that he owned the vehicle he said he had crashed into, and that the car he said he had been driving was in the church car park at the time.

No room for dishonesty. An award-winning hotelier was caught out claiming £34,000 in disability income from his insurer saying that his depression and anxiety meant he could not work, when he was in fact running a hotel.  He received a 14-month suspended prison sentence.

A jail sentence is no holiday. A man made multiple claims to different travel insurers claiming that illness meant he had to cancel his family holiday. He used fake airline tickets, bank statements and emails of hotel reservations to claim nearly £20,000. He received a 16-month jail sentence.

Crate expectations of compensation. Earlier this year, a woman who staged a fall over a crate in a supermarket in West Yorkshire to claim compensation, received a 21-month suspended jail sentence.

It’s only rock and roll. A retired fridge engineer dropped his claim for hearing loss caused by his work, when it emerged that he was a frontman in a rock ’n’ roll band. Claim documents denied that he had any noisy hobbies. The judges gave the insurer permission to bring a case for contempt of court.

The ABI’s latest detected fraud figures show that in 2018:

  • A total of 469,000 insurance frauds were detected by insurers. Of these, 98,000 were fraudulent claims, with 371,000 dishonest insurance applications. The number of fraudulent claims detected fell 6% on 2017, while the number of dishonest applications for cover rose by 5%.
  • The value of the 98,000 dishonest claims detected, at £1.2 billion, fell marginally by under 1% on the previous year.
  • Motor insurance scams remained the most common and most expensive, with 55,000 dishonest claims worth £629 million detected. The number and value of these claims both fell on the previous year – down 8% and 9% respectively.
  • Of the 55,000 motor insurance frauds, 80% involved personal injury fraud. These ranged from staged crash for cash frauds to opportunistic scams. The measures in the Civil Liability Act will help ensure fair compensation for genuine claimants.
  • There were 20,000 property frauds detected, down slightly on the previous year. However, the value of these frauds, at £115 million, rose by 11%.

Mark Allen, ABI’s Manager, Fraud and Financial Crime, said:

“Insurance fraud is the scourge of honest insurance customers who make genuine claims. Insurance cheats can be ingenious, and are constantly looking for new scams to exploit, which is why the industry makes no apology for spending around £250 million a year on measures to tackle this crime. Spearheaded by the Insurance Fraud Bureau and the Insurance Fraud Enforcement Department, there will be no let-up in the industry’s determination to root out fraudsters and press for the stiffest possible penalties for these cheats.”

Ben Fletcher, Director of the Insurance Fraud Bureau (IFB), said:

“Today’s announcement by the ABI shows that organised motor fraud is still a big problem and one that the insurance industry, working together with the police, will continue to tackle.  Fraudsters are constantly reinventing themselves and application fraud and liability are areas of growth that we now need to focus on. It’s also important that members of the public continue to report suspected fraudsters anonymously through our Cheatline service, which is a valuable tool for disrupting fraudsters.”

Detective Chief Inspector Andrew Fyfe, Head of the Insurance Fraud Enforcement Department, said:

“The actions of insurance fraudsters increases premiums for honest customers and costs the insurance industry millions of pounds a year. Not only that, certain tactics used by these fraudsters, such as crash for cash claims, can put the lives of innocent members of the public at risk. For this reason, IFED continues to come down hard on insurance fraudsters; achieving convictions and other sanctions against these criminals on a weekly basis.
“Whilst we are pleased more and more fraudsters are behind bars, we will not be resting on our laurels. We will continue our dedicated work, alongside our partners in the insurance industry, to find those committing fraud and put them before the courts to ensure justice is done.”