Insurance fraud cases in 2013 up 19% over 2012: Aviva UK

Insurance company says it detects over 45 fraudulent claims per day

In 2013, Aviva detected more than £110 million ($177 million CAD) worth of insurance fraud in the UK – a 19% increase compared with 2012. Aviva detects over 45 fraudulent claims per day worth more than a total of £300,000.

According to Aviva’s data, insurance fraud is increasingly carried out by third parties – people who are not insured with Aviva but who are making a claim against an Aviva customer (e.g. for spurious injuries as a result of an accident) – and also by organized gangs.

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“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,” said Tom Gardiner, head of Fraud at Aviva, in a press release.

The most common type of fraud in the UK, according to Aviva, is motor injury fraud, which represents 54% of Aviva’s total detected claims fraud costs. Over 50% these are from organized so-called “cash for crash” claims.

“We are witnessing a trend toward third party, injury and organised fraud. For example, in 2013, we identified fraud in one in nine third party injury claims,” added Gardiner.

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Aviva is currently investigating 5,500 suspicious injury claims linked to known fraud rings – an increase of 20% since 2012. The Insurance Fraud Bureau (IFB) estimates that one in seven personal injury claims are linked to suspected “cash for crash” claims; the total annual cost to insurers for cash for crash is estimated at £392 million every year (IFB).

According to Aviva, there is considerable concern among consumers about the scale of insurance fraud. Research conducted by the insurance company found 9 in 10 people believe it is unacceptable, and almost 2 in 3 (64%) want insurance companies to do more to tackle fraud.

Despite this, many people turn a blind eye to fraud. Two-thirds (66%) of people would not report it to the police if someone they knew committed insurance fraud – a 53% increase compared to a 2008 survey by Aviva. Consumers also appear to underestimate the impact of fraud as just 1 in 10 think they will be affected by it, whereas in reality, everyone is affected by it in the form of higher premiums, and more road accidents are caused by fraudsters seeking injury compensation.

Aviva’s research also found that 23% of people knew someone who had exaggerated a genuine claim and 17% knew someone who had faked a whiplash injury to obtain compensation.

The number of people surveyed who said they would consider exaggerating a claim increased by 35% to more than one in eight, compared to five years ago.

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