Growing dishonesty culture fuelling rise in insurance fraud

Article date: 28 January 2008

Three in four (75%) British adults believe that dishonesty is rife in today's society, and almost half (46%) believe the UK has seen a significant shift in attitudes over the past decade, leading to a society that is more tolerant and accepting of dishonest behaviour, according to a new study* by Norwich Union, the UK's biggest insurer.

The research reveals that despite people's distaste at what they perceive to be an increasingly dishonest society, as many as 7% admit to committing fraud, and nearly half (43%) say they would turn a blind eye to a friend's or relative's dishonest actions.

Key findings:

  • One in 10 people would exaggerate an insurance claim if they believed there was no chance of being caught out
  • 7% of the UK population admit to having actually committed at least one of the following:
    • Falsely reporting a mobile phone as lost or stolen to get a free upgrade

    • Exaggerating an insurance claim

    • Concealing an accident record to get a low car insurance quotation

The findings come as Channel 4's Cutting Edge documentary, Scams, Fiddles and Honest Claims, goes behind the scenes with the "Insurance Investigators". Filmed over two years with unprecedented access to Norwich Union's Manchester-based Special Investigations Unit, the observational documentary follows both the fraud investigators and the human stories of the policyholders being investigated.

Norwich Union commissioned its "Honesty" study to examine attitudes and behaviours in today's society and to help understand how and why insurance fraud is on the rise.

With as many as 10% of all insurance industry claims thought to be false, representing a cost of over £1.6 billion a year, fraud is having a significant impact on the cost of premiums. It is estimated that cheats push up the cost of insurance by nearly £40 for every average premium.**

Leading criminologist Paul Kiff, who worked on the research with Norwich Union says it uncovers a culture where acts of dishonesty are deemed increasingly acceptable by people from all walks of life, ages and backgrounds. 

"The study shows that people think dishonesty has become widespread, which can make what they perceive to be ‘small' acts of dishonesty justifiable and socially acceptable in their minds. Paradoxically, the perception that society is more dishonest than ever appears to influence individuals to participate in fraudulent or dishonest acts themselves, thereby directly contributing to an increase in fraud."

Norwich Union has identified a number of key areas where consumers make fraudulent insurance applications and claims:

  • 1. Organised fraud: This is where criminal gangs take out insurance policies with the specific intention of committing fraud
  • 2. Making bogus claims: where the insured person fabricates a claim entirely.
  • 3. Exaggerating legitimate claims: where the insured person has a genuine claim but exaggerates the value to receive a greater pay-out
  • 4. Incorrect ‘no claims discount': where people claim more "no claims" than have actually been accrued
  • 5. Double address: where people declare a different lower risk address for their vehicle, when in fact it is kept at a high risk postal address
  • 6. Not declaring accidents or convictions: details of motor accidents are held on an industry-wide database so declared accidents can be checked
  • 7. Annual Mileage: this is often understated but insurers can easily check by looking at MOT certificates
  • 8. Fronting: where a parent insures a second car in his/her name when their child is actually the main user in order to claim full NCD and not pay the full cost of a high insurance risk
  • 9. Driving other cars: where motorists pay for insurance on one car and then drive another car under ‘driving other cars' cover - Eg insuring a mini and driving a Porsche. This amounts to non insurance since the other car has to be both insured and not owned by the individual
  • 10. Other rating factors: where people declare the wrong age, sex, martial status or payment method and even the wrong car!

Dominic Clayden, director of claims at Norwich Union, comments: "As much as 60% of all insurance fraud is committed by ‘opportunistic fraudsters' who tend to be motivated by a belief that ‘everyone else is at it' or by a concern that they will not be paid the full value by their insurer.  These concerns are in fact entirely misplaced, our priority is to pay genuine claims in full, as quickly as possible.

"Last year Norwich Union identified and denied 20,000 fraudulent claims, worth approximately £150 million. Not many people realise that if any part of their claim can be shown to be fraudulent the whole claim is potentially invalidated and you risk not receiving any payment at all.

"The fact is that claims costs drive future premiums and consequently the more fraudulent claims there are the more premiums must be inflated for the honest, law abiding majority.  Put simply, a more honest society would mean less expensive insurance, and until this happens, fraud prevention must be an increasingly central part of all insurers' business models."

Scams, Fiddles and Honest Claims, part of Channel 4's Cutting Edge strand can be seen on Thursday 31 January at 9pm.


Notes to editors: 

*Ipsos-MORI quantitative survey of 1,999 UK adults in November 2006 using face to face and telephone interviews.
** Figures from ABI General Insurance Claims Fraud Report October 2007

For more information, please contact: 
Lexis Public Relations
Anna Carter
020 7908 6431

Norwich Union Press Office
Rebecca Holmes
01603 354 346/07800 690 731

Notes to editors

  • Norwich Union is the UK's largest general insurer with a market share of around 15%, with a focus on insurance for individuals and small businesses.
  • It is a leading provider of life, pensions and investment products and one of the largest Financial Adviser (FA) providers.  FAs provide over 70% of the company's long-term savings business in the UK.
  • Norwich Union's news releases and a selection of images are available from Aviva's internet press centre at

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