Tackling the insurance fraud iceberg
The past 12 months set a high water mark for fraud. Annual fraud losses across the UK are now estimated to be £70 billion. Of this, £3.5 billion is in financial services, with insurance fraud topping £2.1 billion, marking a 23 per cent year-on-year rise.
These are big numbers and they are significant numbers given our insurance industry is the largest in Europe and the third largest in the world, accounting for around seven per cent of total worldwide premium income. It employs nearly 300,000 in the UK alone and is one of the UK’s biggest exports.
Broadly speaking the numbers break down into an estimated £1.7 billion in undetected fraud losses, £38 million in detected insurance fraud when claims get paid before being flagged as fraudulent and £350 million in organised staged motor vehicle accidents.
Across all financial services, the vast majority of fraud – more than 90 per cent - is being carried out by consumers or ‘non-professional’ fraudsters – so-called first-party fraud.
But the industry offers rich pickings for fraudsters and as a result it continues to be blighted by fraud.
Insurers continue to be in the firing line in the UK because as the cost of austerity bites, those struggling with challenging economic times see it as quick route to converting their monthly premiums into a payout.
Source - Experian
Read more at www.experian.co.uk/identity-and-fraud