Fraud costs insurers '£4m a day'

09-05-2007

Fraud costs insurers '£4m a day'
Insurance fraud costs UK insurers some £4 million a day, new research has indicated.

A survey by the Association of British Insurers (ABI) found that one in ten adults had admitted to filing a fraudulent insurance claim.

The trade body said that their dishonesty was adding an average of almost £40 to the annual premiums of other policyholders and costing the industry £1.6 billion a year.

Policyholders were most likely to lie about insurance claims related to their properties, the ABI survey of almost 7,000 people found.

About half the total cost of dishonest claims each year relate to home contents and building insurance, the association confirmed.

Meanwhile opportunistic fraud, where a claimant increases the true price of an item that has been damaged, is estimated to cost insurers more than £800 million annually.

Commenting on the research, ABI's director of general insurance and health, Nick Starling, said: "Honest customers should not have to pay for the cheats.

"These figures highlight that greater deterrents, such as criminal prosecutions, are needed to discourage fraud. This is why we are calling for police forces to be given more resources so that fraud can be treated with the seriousness it deserves," he added, stressing that the recently established Insurance Fraud Bureau (IFB) was already having a "significant impact" on tackling organised insurance fraud.

The IFB, launched by the insurance industry in July 2006, welcomed the government's response to the Fraud Review in March, but warned that greater police resources were needed on a national scale to maximise its own impact through a collaboration with law enforcement authorities.



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