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Aviva reports 19pc hike in fradulent claims

17:31 23 April 2014

Aviva pledges to pay minimum wage. Pic: PA.

Aviva pledges to pay minimum wage. Pic: PA.

Aviva has reported a 19pc year-on-year increase in fraudulent claims, which it says is being driven by organised gangs and a “lack of effective deterrents”.

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The EDP Top100 firm said it uncovered more than £110m-worth of motor insurance fraud last year, marking a 19pc increase compared with 2012, with the bulk of bogus claims being due to motor insurance fraud.

Motor injury fraud makes up over half (54pc) of Aviva’s total detected claims fraud costs and the insurer said that much of this is down to organised gangs making “crash for cash claims”, where criminals deliberately stage an accident, sometimes by slamming on their brakes so that an unsuspecting motorist drives into the back of them.

Aviva said it is currently investigating 5,500 suspicious injury claims linked to “known” fraud rings, representing an increase of 20pc since 2012.

It comes as Norwich insurance services Validus–IVC reported earlier this week that its anti-fraud search engine AskLudo had identified £20m worth of erroneous or fraudulent credit hire claims since it was created four years ago.

Tom Gardiner, head of fraud at Aviva, said according to industry estimates, fraud adds around £50 to the cost of everyone’s insurance premium.

He 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 good news is that we are constantly improving our ability to prevent and detect fraud.”

Mr Gardiner continued: “We are witnessing a trend toward third party, injury and organised fraud. For example, in 2013, we identified fraud in one in nine third party injury claims.”

Aviva said that last year, it settled more than 910,000 claims worth £2.65bn and fraud was identified on less than 1.9pc of claims it received.

• Has your business suffered at the hands of fraudsters? Contact business writer Ben Woods on ben.woods@archant.co.uk

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2 comments

  • Surely it is not that fraudulent claims have increased recently, it's just that now Aviva have decided to do something about it. When Norwich Union, like many other insurance companies, fired much of their litigation department because they decided that it was cheaper to settle claims than go to court to contest them, people who knew said there would be a massive increase in fraud. Now it seems they are back to square one and it has dawned on them that they can cut costs by contesting fraud. It's just a shame so many innocent people have suffered injury and loss by being caught up in the scams,not to mention having to pay for them by way of higher premiums. If the industry had not lost their common sense and moral compass this criminal industry would never had flourished.

    Report this comment

    Cyril the Canary

    Friday, April 25, 2014

  • Motor injury fraud increase - nothing to do with accident details having been misappropriated and sold on by Aviva staff by any chance?

    Report this comment

    guella

    Wednesday, April 23, 2014

The views expressed in the above comments do not necessarily reflect the views of this site

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