The average cost of an insurance scam has risen 20% to nearly £15,000 in the past year, according to new figures published by the Association of British Insurers today.

Despite the rise, the number of fraudulent claims detected fell to 72,600 in 2022 - down 19% on 2021.

The ABI says a crackdown on cheats is paying dividends but fraudulent claims remain a problem and the cost of claims is rising.

Despite the drop in the number of claims, the total value of claims fraud fell by just 4%, with the value of opportunistic fraud increasing by 2%. The total cost to the industry was £1.1billion, the ABI said. 

Scam bogus claims during the year included:

• A man jailed for making bogus medical claims worth £24,000 against 3 insurers. These involved submitting fake receipts for non-existent medical treatments   

• A fraudster jailed for four years as a result of him cloning the identity of a claims management company to arrange over 60 false motor insurance claims, worth £26,000    

• A London man who stood to pocket £50,000 by acting as an illegal insurance intermediary

• An employee at a veterinary practice caught claiming over £37,000 in fraudulent pet insurance claims.

According to ABI figures, the total number of fraudulent claims detected fell by 19% on 2021 to 72,600 cases. Of these, the number of opportunistic frauds dropped by 18% to 63,000 cases. There was a 20% fall in the volume of fraudulent personal injury claims, largely as a result of the Official Injury Claim portal reducing the overall number of small personal injury claims being made.

Motor insurance continues to make up the largest volume of fraud cases at 42,500, representing 59% of total insurance claims fraud.  

Mark Allen, the ABI’s assistant director, head of fraud and financial crime, said: “While it is good to see the industry’s collaborative efforts delivered results in 2022, there can be no room for complacency. With many households and businesses continuing to face rising costs, now more than ever honest customers expect insurers to weed out the cheats and focus on paying genuine claims as quickly as possible.   

“Fraud is now the most reported crime in England and Wales. As financial hardship increases, previously honest customers could be tempted to ‘act in the moment’ to exaggerate claims. These latest figures highlight that some fraudsters are aiming big, with some large frauds uncovered. This shows why there can be absolutely no let-up in pursuing insurance fraudsters.”

Anyone who suspects fraud can report it confidentially to the Insurance Fraud Bureau’s CheatLine on 0800 422 0421.

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