There has been a sharp increase in insurance fraud claims this year, and it has been suggested that the surge has been driven by mounting cost-of-living pressures, a new report from Zurich UK has found.
According to the insurer, it saw the number of fraudulent property claims jump by 25% between January 01 and May 31, compared to the same period last year. Zurich UK also noted that in the last five months, the insurer prevented fraud totalling £4.2 million, which is up from £3.3 million over the same period in 2021. This translates to over £40,000 a day.
Zurich UK noted that high-value jewellery, mobile phones and TVs were among the most common items that fraudsters have claimed to be lost, stolen, or damaged. The average value of a fraudulent claim was about £8,800.
In 2021, Zurich UK uncovered over £8.4 million worth of fraudulent property claims, which is a considerable increase from the £4.7 million the company had prevented in 2020. The number of claims rejected due to fraud jumped 20% from 394 to 473.
“We understand that the rising cost-of-living has made the past few months particularly hard for many people across the country – but turning to crime is never the answer,” commented City of London Police’s Insurance Fraud Enforcement Department detective chief inspector Tom Hill.
Hill added that while submitting a bogus insurance claim may seem like a victimless crime, it drives up the cost of premiums for all, and it could also land those caught with a criminal record.
“Exaggerating or fabricating a claim for a pricey watch or television may seem like a quick way to make money, but a conviction will have a lasting impact on your life,” the officer said.
“Sadly, many more people are facing hardships as a result of the cost-of-living crisis, which is contributing to an increase in fraudulent claims,” added Zurich head of claims fraud Scott Clayton. “Since the start of the year, we’ve seen a significant rise in bogus property claims, as households and businesses come under increased financial strain.”
Clayton also noted that Zurich is “better prepared than ever to detect [fraud].”
The insurer has invested in new NetReveal software, which utilises algorithms and data analytics to discover fraudsters trying to conceal their identity by providing false name or address details. Zurich is also planning to launch real-time fraud checks at the point a claims handler submits a claim on the insurer’s systems.
“New technology is helping us to fight fraud more effectively and making it harder for scammers to evade detection, whether they are individual opportunists or organised criminal gangs,” commented Clayton.
