Insurance industry warns of sharp rise in fraud

The insurance industry says bogus claims are costing £2bn a year

Bogus insurance claims in the UK rose almost 10% in 2010 from 2009 to an average £18m every week, according to the Association of British Insurers.

Investigators uncovered 133,000 fraudulent claims, with about 66,000 of these related to home insurance.

Motor fraud was the next most common, with 40,000 cases uncovered.

"Fraudsters continually look for new ways to con insurers, so we are upping our game," said Glen Marr director of the Insurance Fraud Bureau.

Examples uncovered included:

• A claim for back injuries while working in a nightclub was rejected when Facebook images showed the claimant performing gymnastics;

• A claim for face injuries said to have resulted from a falling toilet roll holder in a fast food outlet was rejected when it was shown that the equipment would have had to have fallen upwards to cause the injury;

• A claim by a woman for the loss of a £2,000 watch after a night out was rejected when the photograph she provided of her allegedly wearing the watch turned out to be that of a friend;

• A claim for injury said to be caused by falling over a wall was rejected when it was proved that there was no wall at the scene of the alleged incident.

The ABI estimates that insurance fraud costs £2bn a year, adding, on average, an extra £44 a year to the bill for every UK policyholder.

Crackdown

Over the last five years both the number and overall value of such frauds detected had risen by over 100%, the ABI said.

Nick Starling, the ABI's director of general insurance and health, said that tougher surveillance measures were being introduced to tackle bogus claims.

"Early next year we will be setting up a national Insurance Fraud Register, which will contain details of all known insurance cheats."

He also highlighted the launch of a national police unit to investigate such fraud.