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Daily Insurance Industry News
Sunday 21st of January 2018
April 16, 2009

ABI state insurance fraud at record levels

by Richard Kilner

Story link: ABI state insurance fraud at record levels

The ABI (Association of British Insurers) has revealed figures which show that insurers are detecting record numbers of fraudulent claims.

The false claims, worth £14m a week, totalled 107,000 last year, a rise in number of 17% on 2007 and a rise in value of 30%.

Home insurance was particularly prone to fraud with 55,000 false/exaggerated claims being made, with motor insurance suffering the most expensive false claims.

One in every 25 claims were fraudulent in 2008.

In more research commissioned by the ABI and carried out by pollsters YouGov on 3,000 adults, 20% of respondents confessed that they would not rule out making a fraudulent claim in the future.

General Insurance and Health director at the ABI Nick Starling has stated that fraud thrives on recession, and costs everyone as it adds £40, on average, to insurance premiums.

Therefore, by cracking down on the cheats, honest customers gain as premiums fall in cost.

Furthermore, people caught committing fraud will see the cost of insurance and credit in the future rise, in addition to gaining a criminal record.

The ABI’s discovery is backed up by Allianz, which has seen a sharp upturn in fraudulent claims made in Q1 of this year.

The findings come shortly after specialist insurer Hiscox warned that the rise in unemployment caused by recession could fuel another white collar crime: extortion.

Although many of the crime warnings regarding the economic challenges faced today focus upon more obvious areas such as burglary and theft, rising unemployment will mean some will use their knowledge of their former workplace to embark upon extortion.

And, as the ABI has stated, insurance fraud is already rising to record levels, raising the costs of insurance for everyone.

 

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