Insurance fraud costs everyone

Insurance fraud ranges from exaggerated genuine claims or injuries to entirely fictitious claims and accidents.  Last year, we uncovered £110m-worth of false insurance claims*, increasingly, it’s organised gangs that are behind them. More often than not, it’s not our customers who are dishonest – it’s the people who claim against them (like saying they’ve whiplash after an accident when they don’t). 

We’re working hard to uncover fraud though, to keep down the cost of your premium. Tom Gardiner, our Head of Fraud, says “A combination of factors, including the economic climate, social attitudes toward insurance fraud as a ‘victimless’ crime, and a lack of effective deterrents are increasing the frequency of insurance fraud.

“The good news is that we are constantly improving our ability to prevent and detect fraud, helping to keep premiums down for innocent policyholders. The Association of British Insurers [ABI] estimates fraud adds £50 to the cost of insurance premiums.” 

Fraud facts

  • We uncovered £110m of fake insurance claims in 2013
  • The amount of money falsely claimed for has risen 19% since 2012
  • On average, we get 45 illegal claims each day (1.9% of all our claims)
  • False motor injury claims are the most common (54%)
  • Over half of false motor injury claims are organised ‘cash for crash’ scams.

Some criminals go to extreme lengths

In one of the more audacious ‘cash for crash’ scams a minibus allegedly travelling to a stag party was supposed to have caused a collision with another car in a tunnel, giving everyone inside whiplash injuries. 

We got suspicious when we compared the scale of the injuries to the collision, and asked our Special Investigations Unit and local police to investigate. CCTV footage showed the other vehicle wasn’t at the scene at all, and the car’s driver and passenger knew the mini bus group on social media sites. 

In reality, they’d deliberately damaged the minibus elsewhere before driving to the scene of the ‘incident’, scattering debris and staging the accident. 

Worse still, as well as claiming over £100,000 compensation, six ambulances came to the scene and everyone was treated at the local hospital – a wider cost to society that put other lives at risk. 

16 people were arrested, and 13 received suspended sentences, community service and modest fines of several hundred pounds. It was a disappointing outcome, considering some people we’ve prosecuted for bogus whiplash claims have been handed four to seven-year sentences.

Aviva’s combating a worrying trend

We have a market leading capability when it comes to detecting organised fraud. 25 people here focus on it – more than any other insurer. Right now, they’re investigating 5,500 suspicious injury claims linked to known fraud rings; that’s 20% more than 2012. And we also share information with other insurers, the Insurance Fraud Bureau and the Insurance Fraud Enforcement Department. 

Surveying public opinion ** 

  • Nine in 10 people believe fraud is unacceptable

  • Almost two thirds (64%) want insurance companies to do more about it

  • 23% knew people who’d exaggerated genuine claims

  • 17% knew someone who’d faked a whiplash injury for compensation

  • 35% more people said they’d consider exaggerating a claim

  • 66% wouldn’t report fraud to the police (a 53% increase on a 2008 survey)

  • Nine out of 10 don’t think insurance fraud affects them – though it increases premiums.

Perhaps it’s no surprise that 92% of people believe dishonesty is a problem in today’s society, up from 75% in 2008!

 * Aviva claims fraud detection data for 2013
** Consumer research conducted among 2,015 UK adults by Opinion Matters


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