Insurance fraud is costing insurers £5.2million a day

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Insurance fraud is costing insurers £5.2million a day

21 July 2009 / by Andy Davies

Insurance fraud is now estimated to cost insurers £5.2million every day, according to a report published by the Association of British Insurers.

But the figures released by ABI show that insurers are now fighting back against fraudulent claims with £730million of frauds being detected and prevented last year, which is a 30 per cent increase on 2007.

Many fraudulent claims though are still going undetected costing insurers £1.9 billion, this is a 24 per cent rise compared to £1.6billion two years ago.

As a result of these fraudulent claims, every household’s general insurance costs have risen by £44.

In attempts to get cheaper insurance, more people are being caught lying or withholding important information from insurers.

Reacting to the news, Gordon Hannah, director of claims and operations at Esure, said: “The ABI’s figures highlight the recent surge in insurance fraud – both when policies are taken out and when claims are made. 

“Left untackled, this type of fraudulent activity will have a knock-on effect of increasing premiums for millions of honest motorists and homeowners across the UK.

“Insurance is there to help honest people with genuine claims and we’re doing all we can to crackdown on people who are trying to abuse the insurance system in these difficult economic times,” he added.

© Fair Investment Company Ltd

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Written by Editorial Team