Insurance fraud has increased 30% since 2007, the Association of British Insurers (ABI) is expected to confirm in a report this week.
According to the Observer newspaper, the ABI will report that undetected fraudulent claims now cost an estimated £1.9 billion per year, compared to £1.6 billion two years ago.
Despite rising fraud costs, the ABI claims progress is being made.
“Through closer scrutiny of proposal forms and claims, as well as the exchange of information through industry-wide databases, the net is tightening on the cheats,” said Nick Starling, ABI director of general insurance and health.
“Anyone who sees insurance as a soft touch can end up with a criminal record, credit problems and costlier and harder-to-obtain insurance.”
The ABI’s report will also show a rise in “walk away” fraudsters where a fraudulent claimant decides not to pursue the claim after being asked for more details from the insurer.
Motoring show Top Gear was recently criticised by the insurance industry for advocating the fraudulent practice of fronting to save young drivers money on their car insurance.
“Fronting is a common fraud and we would urge parents to avoid the practice as, if found out, the consequences could be severe,” said Hayley Parsons, chief executive of Gocompare.com.
