The number of fraudulent claims identified and declined by Allianz Insurance in Guildford has almost doubled over the same period last year, saving the company and honest policyholders more than 5 million pounds (approx. 5.8 million euros). The fraud detected has been across both the commercial and personal books of business and includes fraudulent commercial arson and exaggerated business stock claims as well as personal injury claims against businesses by employees and non-employees.
Steep rise in insurance fraud
Commenting on the rise in fraud detection, Roy Hebburn, divisional claims manager, said: "Many people are now facing economic hardship and, as a result, the temptation to commit insurance fraud is significantly greater. There has been a steep rise in the number of fraudulent personal injury claims detected by our claims teams involving 'slips and trips' and employees attempting to pass off, for example, sporting injuries as work-related. Insurers are becoming increasingly more proficient at catching fraudsters and we have given extra training to our claims technicians as well as growing the size of our counter-fraud teams."
Organized crime has a serious impact on the insurance industry and costs insurers around 353 million euros annually
Insurance Fraud Bureau
Organized crime has a serious impact on the insurance industry and costs insurers around 300 million pounds (approx. 353 million euros) annually. The Insurance Fraud Bureau (IFB), established in 2006, works in collaboration with police forces countrywide to help identify crime rings and see offenders tried and prosecuted. To-date they have achieved very positive results that have led to more than 281 arrests and 29 cautions. 94 offenders have been charged and 31 individuals convicted of their crimes and this is set to increase during 2009 as further trials conclude.
Three of these operations to be successfully concluded include Operation Mysterious, Operation Keep and Operation Hydra. The first – Operation Mysterious in collaboration with Hertfordshire's Serious and Organized Crime Group investigated and closed down a criminal syndicate that staged road traffic collisions and subsequently submitted false insurance claims for compensation totalling more than a quarter of a million pounds. The gang received a total of ten years' imprisonment.
The second successful initiative that the IFB was recently involved in was Operation Keep, a joint operation with West Yorkshire Police. In February 2007, the IFB first noticed that suspicious claims were being submitted to multiple insurers from an accident management company. Dawn raids resulted in 22 arrests for conspiracy to defraud insurance companies. Fraudulent claims, false repairs and replacement hire cars were proved by the use of sophisticated analytical tools and detailed forensic examinations.
Fraud figures prove that people are more than willing to use their insurance policies as a way of bringing in some extra cash when times are tough
Operation Hydra
Run in collaboration with the City of London, police recently came to a positive close at Blackfriars Crown Court. Three 'crash for cash' gang members facing charges of conspiracy to defraud insurance companies received a total of nearly seven and a half years' imprisonment. Suspicious activity was first identified by the IFB at the end of 2007.
Working in collaboration with its members, the IFB unearthed multiple claims showing similar details such as addresses, mobile phone numbers and bank accounts and multiple bogus insurance policies that had been taken out across more than 20 insurers. The case included over 300 'invented' motor accidents that were said to have occurred in the London area between 2005 and 2007, amounting to a combined claims value of around 3 million pounds (approx. 3.5 million euros).
In addition to its collaborative work with the police, the IFB is responsible for managing the 'Cheatline', which has received nearly 2100 reports of suspected fraud since July 2006. Since launching 'Cheatline Online' in November 2008, half of all reports are now made via this online facility.
ABI warns fraud costs up 30 percent
The Association of British Insurers' (ABI) latest fraud figures prove that people are more than willing to use their insurance policies as a way of bringing in some extra cash when times are tough. Figures show a 17 percent rise, this means four percent of all GI claims are fraudulent.
Insurers detect 2000 fraudulent claims every week, worth 14 million pounds (approx. 16 million euros). According to the ABI, one in five people say they would cheat on their insurance despite the risk of a criminal record.
ABI figures show that in 2008:
- 107,000 fraudulent insurance claims were exposed, a rise of 17 percent on 2007. Fraudulent claims were worth 730 million pounds (approx. 858 million euros), up by 30 percent on the previous year
- Four percent of all GI claims by value were fraudulent, compared to three percent in 2007
- There were 55,000 false or exaggerated home insurance claims detected
- 360 million pounds (approx. 423 million euros) of fraudulent motor claims were stopped, worth four percent of total. In a separate survey of 3,000 adults carried out for the ABI by YouGov, one in five people admitted that they would not rule out making a fraudulent claim in the future.
Nick Starling, the ABI's director of general insurance and health: "Fraud thrives in a recession, so insurers are intensifying their crackdown on insurance cheats. Fraud adds an extra 40 pounds (approx. 47 euros) a year to the average premium, which is why the harder we make it for the cheats, the more competitive premiums will be for honest customers."
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