Daily Insurance Industry News
 
 
Daily Insurance Industry News
Tuesday 23rd of January 2018
October 18, 2007

Sharp rise in general insurance fraud

by Gill Montia

Story link: Sharp rise in general insurance fraud

The Association of British Insurers (ABI) has published its latest research into general insurance fraud, showing a sharp increase in the number of cases.

According to the ABI, one in 11 claims submitted is false, a figure threefold that of 2003.

Household insurance claims account for over half of this kind of fraud with incidents such as self-inflicted damage to carpets.

However, in around 85% of fraudulent claims, the value of goods that have genuinely been lost is exaggerated.

The cost of fraudulent claims is estimated at £480 million a year, which adds an average of £40 to premiums.

In addition, industry initiatives to detect and prevent insurance fraud cost around £1.6 billion a year.

Past research from the ABI has established that some policyholders regarded making false claims as acceptable because they know other people are doing it.

For others, the excuse is that insurance companies make large profits and a relatively small claim is of little consequence.

Nick Starling, the ABI’s director of general insurance and health, warns that perpetrators of insurance fraud are more likely to be caught than ever before and could face higher insurance and credit costs as a result.

 

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