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Insurers set up fraud register as bogus claims rise
September 13, 2012 / 12:51 PM / in 5 years

Insurers set up fraud register as bogus claims rise

LONDON (Reuters) - British insurers on Thursday launched a register of insurance fraudsters after calculating that bogus claims rose 5 percent last year, adding 50 pounds to the average policyholder’s bill.

The register is designed to help insurers identify fraudulent claims, easing a financial burden that has weighed on the industry’s profits, the Association of British Insurers said.

“The register will make it easier for insurers to prevent fraud by making details of known fraudsters available to insurers through a secure protocol,” said Richard Davies of the ABI’s Financial Crime Committee.

“Those that defraud insurers and their honest customers face real and tangible consequences for their actions.”

Insurers detected 139,000 bogus claims in 2011, saving themselves almost 1 billion pounds of payouts, according to the ABI.

Fraudulent motor insurance claims were the most costly, accounting for more than half the savings. British motor insurers say a steady rise in spurious or fraudulent claims has been a factor behind their suffering an underwriting loss every year since 1994.

According to the Insurance Fraud Bureau, an industry-funded body set up in 2006 to investigate dishonest claims, undetected fraud costs British insurers 2.1 billion pounds a year.

ABI members also pay for a 35-man police squad dedicated to tackling insurance fraud. The unit, which launched in January this year, costs the industry about 2.9 million pounds a year.

Britain’s biggest home and motor insurers include Royal Bank of Scotland (RBS.L), Aviva (AV.L), RSA (RSA.L), and Legal & General (LGEN.L).

Reporting by Myles Neligan; Editing by Greg Mahlich myles.neligan@thomsonreuters.com; +44 207 542 13 73

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