Aviva detected over 14,000 fraudulent claims worth £95 million in 2014 – equivalent to 39 fraudulent claims worth an average of £260,000 every day*. The insurer also detected more than 6,300 instances of motor insurance fraud on applications – highlighting that fraud isn’t just a claims problem.
Motor injury fraud
Motor injury fraud – including bogus claims, cash for crash and organised fraud – continues to be the biggest problem area and now accounts for 60% of all claims fraud Aviva detects. Organised fraud increased 28% in 2014 to £38m – an increase of £8m against 2013.
Aviva currently has more than 15,000 suspicious claims under investigation – 6,000 of these are motor injury claims linked to known fraud rings.
Tom Gardiner, Head of Fraud at Aviva, said,
“Our figures show that insurance fraud remains a significant and complex challenge, but the biggest threat to customers continues to be fraudulent motor claims, which puts innocent motorists at risk of physical harm, while pushing up premiums for everyone.“
While genuine claimants have absolutely nothing to fear, our success challenging, defending and prosecuting fraudulent whiplash claims and organised fraud – even where it is not economic – sends a clear message that if you commit fraud against our customers, then it’s increasingly likely that we will catch you and prosecute you.“
We are here to pay genuine claims quickly and fairly. For example, last year Aviva paid more than £2.3bn settling 873,000 claims. However, in the case of motor whiplash claims, we are finding that 1-in-9 claims are tainted by fraud.“
Although Aviva has continued to invest in its ability to detect, challenge and prosecute the plague of fraudulent whiplash claims, and supports steps taken by Government to address the problem, we believe that further steps must be taken to deal with the root cause of the UK’s “cash for crash” industry. Changes we are calling for include removing the cash and profit incentives from the system, such as replacing cash compensation for minor, short-term injuries with rehabilitation.”
Aviva believes that the fight against insurance fraud needs to move from “detection” to “prevention” – and has taken significant steps to prevent fraudsters from accessing Aviva products and targeting Aviva customers.
Aviva detected more than 6,390 instances of motor insurance application fraud in 2014. This ranged from people deliberately misrepresenting their claims history, convictions and addresses on their insurance application to obtain cheap cover, to organised gangs buying policies to make bogus claims.
Aviva has also detected ‘ghost broking’ operations – where unauthorised people sell invalid motor insurance policies, often to innocent motorists, leaving many customers out of pocket and uninsured. One example of large-scale application fraud detected by Aviva was seen in Norwich, where fraudsters set up hundreds of motor policies using addresses in the city without the knowledge of the householders. Within days of the policies coming into force, Aviva began receiving claims from these policies. Aviva declined the fraudulent claims, cancelled the policies and liaised with local media to alert customers and householders to the threat.
In total, this ring generated 157 claims with an estimated value over £3m. Tom continued, “The fight against fraud begins at the front door. We are now screening our personal and commercial motor business at the point of sale and we are committed to protecting our brokers and innocent customers from being targeted by fraudsters and ensuring that fraudsters cannot buy Aviva products.”
*Aviva 2014 Claims Fraud figures