Every hour of every day 15 fraudulent insurance claims are exposed in the UK. Insurance fraud - whether inventing or exaggerating a claim or lying to get cheaper cover - is a serious criminal offence that affects every honest insurance customer, adding an extra £50 a year to their premiums.
Last year insurers uncovered 139,000 dishonest claims worth nearly a staggering £1 billion. This is why we invest around £200 million each year to identify fraud. As well as improving their own anti-fraud systems, firms fund industry initiatives such as the Insurance Fraud Bureau (IFB), a not-for-profit organisation specifically focused on the detection and prevention of organised and cross-industry fraud, and the Insurance Fraud Enforcement Department (IFED), a specialist police unit dedicated to the identification and prosecution of insurance fraudsters.
However, despite this huge investment and the considerable successes of the IFB and IFED to date, we estimate that an additional £2bn of insurance fraud is still undetected. The Insurance Fraud Register (IFR), launched on 13 September 2012, is the latest weapon in insurers' armoury to combat fraud. By bringing together all data on known fraudsters held across the industry, the IFR will enable insurers to weed out insurance fraudsters who have committed fraud against other insurers in the past. It will also be the conduit through which insurers share data with other industries - so an insurance fraudster might not just find it more difficult and more costly to get insurance, but may also find it more difficult and more costly to access other financial services and products.
Reducing and deterring fraud remains a priority for the insurance industry. It is an on-going battle as the fraudsters continually look for new ways to de-fraud insurers and honest customers. The industry makes no apologies for its zero tolerance approach to weeding out the cheats. Honest customers expect nothing less.
This paper provides strategic advice to insurers looking to tackle fraud.
1) Insurance fraud explained.
2) Scale of insurance fraud.
3) The Insurance Fraud Register - the latest weapon in the war on insurance cheats.
4) Industry initiatives to protect honest customers.
5) Six case studies.