uSwitch.com response to ABI insurance fraud comment

Aron Thompson, Head of Insurance at independent price comparison and switching service uSwitch.com, responds to figures released today by the ABI which highlight that fraudulent insurance claims now cost consumers £4 billion a year:

“Fraud is a huge issue within the car insurance industry and undoubtedly it does increase the cost of insurance premiums for honest individuals who have never made a fraudulent claim. The information released today by the ABI which revealed that 5 million adults have made a fraudulent claim at some point on a general insurance policy, which includes car insurance, is extremely alarming.

“The other major concern is that many motorists may not recognise what they are doing as fraudulent.There is the ‘well planned’ fraudster – the individual that takes out a motor insurance policy with the intention of making a claim. But there is also the ‘if I can get away with it’ fraudster – this individual could be an honest member of the community who may break the speed limit occasionally but normally wouldn’t dream of committing a crime. The fraud could be in the form of an inflated claim figure following a genuine accident or they might have included some items in a theft claim that were never in the car.

“With nearly three million insurance claims made in 2005 alone, insurance providers need to continue to invest heavily in the new technology needed to investigate fraud effectively. Measures such as combination questions and accident inspectors are just some of the tactics currently employed by car insurers to investigate possible fraudulent claims. The Aviva Group, which includes Norwich Union and the RAC, also use measures such as voice stress analysis to help them identify if the person they are dealing with is telling the truth. However, more needs to be done to deter drivers from making such claims and the implementation of harsher legal penalties could act as a deterrent.

“If a consumer is convicted of fraud it will become very difficult to get car insurance in the future so making a fast buck could result in a lifetime of excessive insurance costs. Virtually all car insurance brokers and providers use two systems; Motor Insurance Anti Fraud and Theft Register (MIAFTR) and the Claims and Underwriting Exchange to share information making it very difficult to keep the conviction a secret.

“Although we do acknowledge that some consumers will not realise that a claim is technically fraudulent, people should seek advice from their insurer to ensure this is not the case and that they are claiming what they are legally entitled to.”