Aviva has seen a significant uptick in fraudulent claims for 2023, the insurer said in a recent news release.
Aviva revealed a 39% increase in fraudulent claims, with more than 11,000 suspect claims valued at £116 million – averaging 30 bogus claims daily worth £318,000. Additionally, the insurer is investigating 13,100 more claims for potential fraud.
The majority of fraudulent claims, accounting for 66%, were related to motor insurance, particularly for injuries and vehicle damage. Motor injury fraud alone made up 35% of all fraudulent claims detected by Aviva, with a notable 19% increase in declined injury claims, totaling over £23 million. Of this, £6 million stemmed from crash-for-cash schemes.
Many of these fraudulent injury claims were opportunistic, often filed by third parties following minor accidents. Aviva successfully defended over 400 such claims in court to mitigate the impact on customers’ premiums, the company said.
Claims for motor damage saw a staggering 123% increase, as fraudsters exaggerated repair costs and credit hire claims. This trend aligns with a shift observed since the Whiplash Reforms of 2021, which curtailed whiplash-related fraud, pushing fraudsters to focus on repair claims instead.
A concerning practice involves “spoof ads” by some claims and accident management companies, misleading customers into believing they are contacting their insurers. These companies inflate costs, later pressuring customers to pay when insurers challenge these inflated claims.
To combat fraud, Aviva has doubled its fraud investigation team and delivered over 6,000 hours of counter-fraud training. The insurer also supports prosecuting fraudsters, securing over 17 years in custodial sentences and 39 findings of Fundamental Dishonesty in 2023.
Notably, Aviva, in collaboration with the Insurance Fraud Enforcement Department, secured the industry’s first Serious Crime Prevention Order against a convicted fraudster, offering a new deterrent with severe penalties for violations.
Aviva is also pioneering the use of Section 303Z17A of the Proceeds of Crime Act, recovering fraudulent settlement payments from frozen accounts. This legislation, introduced in late 2023, allows crime victims, such as Aviva, to reclaim funds restrained by Account Freezing Orders.
Policy application fraud, including “ghost broking,” surged by 64% in 2023, with Aviva detecting fraud in over 51,000 motor policy applications. Ghost brokers falsely obtain and modify insurance policies, leaving clients unknowingly uninsured, which is both illegal and risky.
Liability fraud, including false slip-and-trip claims, constituted 23% of fraudulent claims, while household fraud, primarily involving valuable items like jewellery, phones, and electronics, made up 6%.
“We’re here to help our customers when something’s gone wrong, settling their claim quickly and fairly. But where we detect fraud, we will vigorously defend fraudulent or inflated claims and, where appropriate, prosecute those who target Aviva,” said Pete Ward, head of claims counter fraud at Aviva. “That’s why we’ve invested in the tools, technology and people necessary to create a robust counter-fraud capability, helping to ensure the cost of insurance fraud is not passed on to our customers.”
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