2009-04-22

By Editor, CIR

False or exaggerated insurance claims increased sharply last year as the recession deepened, the Association of British Insurers reports.

The ABI recorded a total of 107,000 fraudulent claims in 2008, up 17% on 2007, while their value escalated by 30% to GBP730 million.

Dishonest claims on household buildings and contents insurance policies accounted for 55.400 false or exaggerated submissions totalling GBP110 miilion. While fewer in number at 35,300, fraudulent motor claims represented nearly half of the total value at GBP360 million.

Fraudulent commercial insurance claims accounted for 9,800 instances, with a value of GBP240 million.

"Fraud thrives in a recession, so insurers are intensifying their crackdown on insurance cheats," commented Nick Starling, the ABI's director of general insurance and health.

"Fraud adds an extra GBP40 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."

He added that 4% of all insurance claims by value were fraudulent last year, against 3% in 2007.

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