Annual undetected fraudulent insurance claims said to top £1.9 billion
The Association of British Insurers (ABI) has today confirmed that in its opinion undetected fraudulent insurance claims are topping £1.9 billion year. As a consequence of the increase in fraudulent insurance claims the average policy in the UK is now £44 more expensive purely and simply to pay for these illegal activities. So how are detection rates faring in the UK insurance sector?
Despite the fact that £1.9 billion worth of fraudulent insurance claims go undetected each year, the sector has increased overall detection rates by 30% between 2007 and 2008 and reclaimed around £730 million in fraudulent payouts. There has also been a significant number of court actions taken against some of the larger criminal gangs involved in these fraudulent activities, as a means of prevent others from being tempted in the future.
One of the problems which the insurance companies and law-abiding insurance customers are suffering from is the fact that even recovering £700 million of fraudulent claims is expensive and ultimately customers will pay the price. As and when the UK recession comes to an ends we are highly likely to see a significant fall in the number of fraudulent claims as legal funding becomes more accessible and the unemployment market starts to firm up.
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