Third-party insurance fraud perpetrated by non-customers and organised gangs is on the rise, insurers Aviva claimed today.
The firm published data on fraud detection, highlighting a 19% rise in fraudulent claims in 2013 compared to the previous year. Of particular concern was the rise in third party claims - that is claims by people who are not insured with Aviva but who are making a claim against an Aviva customer.
Tom Gardiner, head of fraud at Aviva, said: 'We are witnessing a trend towards third party, injury and organised fraud. In 2013, we identified one in nine third party injury claims.'
Aviva said it was currently investigating 5,500 suspicious injury claims linked to known fraud rings, a 20% rise on the number investigated last year.
Its figures also showed that a majority (54%) of bogus claims were for motor injury, which Aviva cited as the most common type of fraud in the UK. Over 50% of fraudulent motor injury claims were from 'cash for crash' scams where fraudsters stage car smashes, Aviva said.
The annual cost to insurers for 'cash for crash' is estimated at £392m, according to UK Insurance Fraud Bureau figures cited by Aviva.
Aviva said it detected £110m worth of insurance fraud against its business in 2013, up 19% compared to 2012.
Gardiner said: 'A combination of factors including the economic climate, social attitudes toward insurance fraud as a "victimless crime", and a lack of effective deterrents are increasing the frequency of insurance fraud.
'The Association of British Insurers estimates fraud adds £50 to the cost of insurance premiums.'