The research into insurance fraud conducted by Ordnance Survey amongst the UK’s leading Insurance Fraud Investigators (IFI’s) revealed that despite soaring to record levels in 2008, nearly three quarters (74%) of those interviewed have seen an increase in fraudulent claims since the beginning of 2009 and the problem is showing no signs of levelling out.

Insurance Fraud is on the Rise: The Credit Crunch

Four out of five (80%) investigators believe the situation will continue to get worse as they envisage the top issue facing them in the next 12 months will be the credit crunch further fuelling fraudulent claims, followed by fraud being committed at the point when people first take out their policies (43%).

Motor insurance has been hit worst with 34% of IFI’s seeing an increase in fraudulent claims, although the problem is prevalent across the board in all classes of insurance.

Over two in five (44%) have seen an increase in the volume of fraudulent claims made and a similar number (46%) have seen an increase in both the volume and in the monetary value of claims made. Over half (57%) have seen a rise in the number of completely bogus claims made, followed by inflated claims (54%).

Other scams on the increase include the number of serial claimants (47%), activity by criminal gangs targeting insurance companies directly (42%), activity by criminal gangs targeting insurance policy holders (35%) and people lying on application forms or withholding information to save money on policies (33%).

Consequently, fraudulent activity has moved up the agenda of most organizations (68%) and there has been increased investment in fraud detection (60%) to combat the problem, including fraud detection systems, supporting technology and staff.

Fraudsters who are caught run the risk of having a criminal conviction as insurance companies push for maximum penalties, as well as being unable to obtain insurance in the future.

Rise in Insurance Fraud: Examples of Insurance Fraud Against Companies

Just some of the examples of fraudulent claims made against insurers in 2009 include:

• One man tried to make a claim as a result of damage by a pet dog treading paint throughout the entire property. He didn’t actually own a dog and created the paw prints by hand and dribbled paint from the pot to suggest it was caused by the dog’s invisible tail!

• A man claiming on his unemployment policy asked to be dropped off at work on completion of an interview by the insurance company!

• A lady claimed $20,000 as a result of falling whilst out walking on holiday in the USA and suffering a facial injury. Investigations revealed her stitches were as a result of a liposuction procedure.

• Investigations into a claim for a road traffic accident revealed the engine of the vehicle involved had seized up some time ago and the vehicle could not have moved at all, let alone been involved in an accident.

• A lady alleged she was a passenger on board a bus that was involved in an accident. CCTV footage later revealed that she was actually standing at the bus stop at the time of the accident.

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