Attempted insurance fraud down 5%
by Gill Montia
Story link: Attempted insurance fraud down 5%
Attempted fraud rates across the UK insurance sector fell by 5% in 2010, compared with a year earlier, with nine in every 10,000 policy applications and claims detected as fraudulent.
According to a new data from Experian, first-parties were responsible for the overwhelming majority of cases, 80% of which were due to non-disclosure of previous claims or other relevant information.
On the home insurance front, 27% of last year’s detected frauds involved a staged incident or items added to a list of otherwise genuinely stolen goods.
For motor insurance, non-disclosure of claims or convictions accounted for 48% of attempted frauds, while 8% of cases involved “fronting”, where a parent or lower-risk friend was falsely named as the main driver.
However, evidence of identity fraudsters targeting motor insurers has emerged, as 21% of fraudulent claims involved staged accidents where fraudsters then attempted to claim on insurance policies previously obtained using someone else’s identity.
For UK financial services as a whole, 2010 saw an 11% increase in attempted frauds, compared with 2009, with 20 in every 10,000 applications for credit and other financial products discovered to be fraudulent.
Experian also reported a significant rise in attempted first-party mortgage and automotive fraud involving young, professional people.
Overall, mortgage fraud attempts increased by 14%, to 32 in every 10,000 applications, with first-party fraudsters responsible for 97% of cases.
Automotive fraud rates were up 31% on 2009 levels, with 38 in every 10,000 car finance applications discovered to be fraudulent.