Motor insurance fraud fell in the first year in which lower value RTA have been handled by the new web portal, insurers’ representatives have said. But fears remain that the looming cost-of-living crisis could bring about its revival. 

The Association of British Insurers (ABI) said motor insurance was still the most common type of fraud in 2021, but that the number of cases fell by 7%.

In total, insurers detected 49,000 frauds, with their value falling 1% to £577m. The number of organised frauds uncovered rose by 8% to 10,617, which the ABI said reflected renewed efforts to tackle crash-for-cash staged motor scams.

The figures include the period after May 2021 when the Official Injury Claim portal was launched for RTA claims worth less than £5,000 – although analysts are careful not to attribute any fall in fraud to the new system at this early stage.

There are also widely-held concerns about a potential increase in impromptu fraud from individuals seeking money to help with the cost of living, leading to fresh calls for a new taskforce to help address the issue.

Mark Allen, the ABI’s chief fraud and financial crime officer, said insurers will continue to pay legitimate claims as soon as possible but there would be no let-up in the clampdown on fraudulent claims.

He added: ‘With many households battling the cost of living crisis, more than ever honest customers rightly expect there to be no let-up in the industry’s clamp down on insurance fraud, the costs of which end up being absorbed in the premiums paid by all customers.

‘The fall in reported insurance fraud reflects the industry’s sustained counter fraud investment and collaborative approach, but no one can lower their guard against the cheats.’

The Association of Consumer Support Organisations (ACSO), which represents claimant bodies, called today for the government to set up a new insurance fraud taskforce to follow up on the last one that reported in 2016.

That group made 26 recommendations, of which some – notably the whiplash reforms and extra regulation of claims management companies – have been enacted. But there remain gaps in, for example, customer checks by claimant firms and data sharing by insurers, which require action.

Matthew Maxwell Scott, executive director of ACSO, said fraud could well increase in the coming months, citing recent figures from insurer Zurich that showed property fraud was up 25% in the first six months of this year.

He added: ‘In light of the increased fraud risks posed to consumers, insurers and the claims industry from the economic crisis, there is no better time to bring the industry together and agree a set of actions that all sides can work with.’

 

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