At Aviva, our ongoing commitment to tackling fraud in the insurance industry is unwavering. With 39% more instances of fraud detected in 2023 vs 2022 based on our general insurance data, we remain determined to protect genuine customers and take the fight to fraudsters.
To put this into context, in 2023 our Fraud teams uncovered more than 11,000 suspect claims worth £116m – the equivalent of 30 bogus claims a day with a value of £318,000. We're investigating a further 13,100 claims for suspected fraud.* Fraudulent motor insurance claims for injury (up 19%) and vehicle damage (up 123%) represented the majority of detected fraud, accounting for two out of three (66%) suspect claims.
Motor injury and crash for cash
A large proportion of the injury claims we declined for fraud are opportunistic claims brought by third parties (not Aviva customers) – for example, an exaggerated injury claim stemming from a low-speed accident, such as a shunt in a car park. We defended more than 400 such fraudulent or exaggerated bodily injury claims at trial to limit the impact that these claims can have on customers’ motor premiums.
- Motor injury fraud remains the most popular target for fraudsters, accounting for 35% of all bogus claims detected.
- The number of fraudulent injury claims declined for suspected fraud grew by 19% and was worth more than £23m - £6m of which came from declined crash for cash claims.
Motor damage
Fraudulent claims for motor damage rocketed by 123%, as third parties sought to exaggerate and inflate the cost of repair and credit hire claims. We’ve witnessed particular growth in motor damage fraud after the Whiplash Reforms came into effect in 2021, signalling a shift in organised fraudsters’ focus.
Spoof Ads
Though not technically fraud, the use of ‘spoof ads’ on internet search engines by a small number of unscrupulous claims and accident management companies (CMC / AMC) continues to mislead customers into thinking they're contacting their motor insurer to claim for an accident they’ve had.
The trouble arises when the at-fault insurer challenges the inflated costs presented by the CMC or AMC. The claims company will then pressure the customer into paying, as they'll have signed contracts obliging them to pay if the repair, credit hire and other costs can’t be recovered. These costs are frequently in the tens of thousands of pounds. Although this would normally be covered as part of the customer’s insurance policy, because the customer inadvertently (and often unknowingly) claimed via a CMC or AMC, the insurer is both unaware of the claim and unable to help the customer.
Liability fraud
The next largest area for fraudulent claims is liability, such as bogus slips and trips.
- Fraudulent claims for liability represent 23% of all fraudulent claims detected.
- Despite the number of fraudulent liability claims remaining flat, the value of these claims has grown by 9% year-on-year, highlighting the importance of detection in this area.
Household fraud
Household fraud accounted for 6% of detected fraud and was primarily comprised of claims for valuable items. The most popular items that were fraudulently claimed for were:
- Jewellery/rings
- Mobile phones
- TVs
- Laptops
- Tablets
Investment and industry firsts
To protect customers from the effects of fraud, we continue to invest in our fraud detection capabilities.
- We’ve doubled the number of employees dedicated to investigating fraud, as well as delivering more than 6,000 hours of counter fraud training.
- We've invested in vigorously defending fraudulent or inflated claims and, where appropriate, prosecuting those who have committed fraud.
- In 2023, we secured more than 17 years of custodial sentences from prosecutions and 39 findings of Fundamental Dishonesty – the latter of which obliges the dishonest claimant to pay the costs of defending the spurious claim.
We also secured a landmark deterrent against committing fraud, working with the Insurance Fraud Enforcement Department (IFED) last year to secure the first Serious Crime Prevention Order (SCPO) against a convicted fraudster. A breach of the order can result in an immediate custodial sentence of up to five years and an unlimited fine and this is expected to be a powerful weapon preventing known fraudsters from reoffending.
Application fraud and ‘ghost broking’
We identified fraud on more than 51,000 motor policy applications, up 64% on policy fraud detection figures for 2022. The sharp increase reflects the continual training and investment that we've made in our policy fraud detection capabilities. By keeping known fraudsters off our books, we're able to protect customers from the worst effects of policy fraud, making sure our genuine customers don’t pay for the actions of fraudsters.
These figures also include policies sold by unregulated third parties, known as ‘Ghost Brokers’. Ghost Brokers act as an insurance intermediary and purchase insurance policies using false or misleading information about the customer to acquire cheaper insurance. Ghost Brokers will then frequently alter the insurance ‘policy’ before sharing with their ‘customer’ to show ‘proof’ of their insurance purchase. However, the insurance policy is all but worthless, as the ghost broker obtains the policy through lying and misrepresenting the identity and/or nature of the risk being insured such as the address or the age of driver.
The result is that the ‘policyholder’ directly compensates the fraudster for a worthless policy, meaning they are driving without valid insurance which isn't only illegal, but also carries all of the associated risks of driving uninsured.
Pete Ward, Head of Claims Counter Fraud at Aviva, said
“We’re here to help our customers when something’s gone wrong, settling their claim quickly and fairly. But where we detect fraud, we'll vigorously defend fraudulent or inflated claims and, where appropriate, prosecute those who target Aviva. That’s why we’ve invested in the tools, technology and people necessary to create a robust counter-fraud capability, helping to make sure the cost of insurance fraud is not passed onto our customers. This investment has improved our ability to detect fraud across all lines of business and has contributed to the steep rise in the number of fraudulent claims we detected last year – particularly in motor, where exaggerated claims for damage have rocketed.”
*All figures are based on Aviva’s own data for the general insurance fraud it detected in 2023.