Motor insurance giant Aviva has insisted the cost of fraud is increasing – despite admitting that less than 2% of claims are actually fraudulent.
The firm said yesterday it had detected insurance fraud worth more than £110m in 2013 – an increase of 19% on the previous year.
Aviva, which last year called for the removal of solicitors from the small claims process, says more than 45 fraudulent claims are made every day, worth more than £300,000 in total.
But the losses from insurance fraud are a fraction of the total settlements agreed by the insurer – and Aviva’s own figures appear to contradict the insurance industry’s insistence that 7% of motor claims are fraudulent.
Tom Gardiner, head of fraud at Aviva, said: ‘Our priority is to pay genuine claims quickly and fairly while offering a great service to our customers. Last year in the UK, for example, Aviva settled over 910,000 claims worth £2.65bn. We identified fraud on less than 1.9% of claims we received.
‘However, 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.’
Gardiner said there is a trend towards fraud in third-party cases, where one in nine claims were found to be fraudulent.
Meanwhile, a survey of more than 2,000 people carried out by Aviva showed 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 claimant industry will be interested to hear that fraud levels are much lower than previously stated by insurers.
Earlier this month, Tom Jones, head of policy and public affairs at national firm Thompsons Solicitors, accused insurers of inflating the problem of fraud to convince politicians to make reforms.
‘We hear car insurers constantly portraying themselves as victims of “compensation culture” and “whiplash fraud”, yet the reality is that they are making mouth-watering profits from motorists and paying most of it out in dividends,’ he said.
‘The truth is that the insurers exaggerated the problem of fraud to secure legal changes and now they’re reaping the benefits through what they themselves are calling an “excellent” claims environment.’