Insurance fraud is currently estimated to be a £1 billion a-year industry in the UK.
That equates to nearly 3,000 fraudulent claims every week with a value of £19 million. The cost of fraud is estimated to add £50 extra to the annual insurance bill of every UK policyholder.
Experian analysis shows that around 12 in every 10,000 applications and claims were found to be fraudulent in the UK last year, with the vast majority (80%) found to be by consumers, or so-called first-parties. The fraud rate, as a percentage of applications, has increased by 9%.
But the numbers are estimated to be far higher, reflecting a wider culture of misrepresentation from casual, low-level car fronting by mum and dad on behalf of their teenage children, to deliberate and wilful commercial asset exaggeration.
The impact of technological change is also significant. With new opportunities offered to fraudsters through theft of device IDs for smartphones, tablets and PCs driving new and innovative methods for perpetrating fraud over the internet.
This paper studies the changing fraud landscape, methods used to detect fraud and highlights key pointers to adopting a holistic approach to prevention.