Fraudulent insurance claims cost Aviva, the UK’s largest insurer, £90 million last year; equivalent to £246,000 every day. The number of fraudulent claims it received also grew by 6.3% over the previous 12 months.
According to the insurance company, motor claims accounted for two-thirds (£59 million) of overall fraud – an increase of £9 million on 2016 with ‘cash for crash’ and fake whiplash claims collectively making up 66% of identified fraud.
Aviva says it now turns down one in eight whiplash claims which it suspects are fraudulent and is currently in the process of investigating close to 17,000 personal injury claims – 1,000 more than the same period last year.
Levels of organised motor fraud have fallen since 2016, nonetheless Aviva is still investigating some 3,000 cases which are thought to be linked to organised gangs. The reduction was also not enough to offset rising exaggerated personal injury claims resulting from crashes at low speeds.
Aviva says 80% of the fraud it detects is against its own customers and in order to bring fraudsters to justice, it works closely with police. During 2017, Aviva helped make 68 prosecutions resulting in a total of 143 years’ worth of prison sentences.
Commenting on the figures, Tom Gardiner, head of fraud at Aviva, says, “While it’s good news that the number of accidents is falling, we are still detecting more fraudulent claims than before. Whiplash fraud continues to present the biggest threat to customers – not just in terms of pushing premiums up, but by fraudsters putting innocent motorists at the risk of real harm by deliberately causing accidents to make bogus whiplash claims.”
Many of the problems identified by Aviva should be addressed by the Civil Liability Bill that is currently going through parliament. If the proposed legislation gets the green light, the level of compensation available to personal injury claimants would fall and therefore reduce the incentive to commit fraud.
It is also hoped that it reduces the number of calls and texts from so-called ‘ambulance chasers’ that pursue personal insurance claims on your behalf in return for a slice of any pay out.
Mr Gardiner adds: “Change is urgently needed. The proposed Civil Liability Bill will deter fraudsters from pursuing their campaign of crash for cash, simply to line their pockets. The good news in the meantime is that we are detecting, disrupting and prosecuting more fraud.”