Insurance fraud hits record high

UK insurance fraud hit £840 million last year in the UK which was a 14% increase on the figure for 2008. While it is no surprise to see insurance fraud increase during recessionary periods, the amount of money involved is enormous and has surprised many experts. So what impact will it have upon the UK insurance market?

The simple fact is that the more insurance fraud that occurs in the UK the more pressure this places upon law-abiding citizens and the higher premiums will be pushed. Unfortunately, the insurance industry has a habit of passing on any losses to customers and when you consider the massive figures involved we can only expect premiums in the UK to increase dramatically in the short to medium term.

When you consider that one particular area of the insurance market, i.e. the car insurance sector, has seen premiums increase by up to 30% due partly to the cost of insurance fraud over the last 12 months, this perfectly reflects the growing problem. Quite why law-abiding citizens should be forced to increase their premiums to cover the cost of those "breaking the law" is open to debate but this has always been the situation in the UK insurance arena.