London-headquartered insurer, Aviva has published its report on insurance claims fraud for 2021 in the UK, which showed that the number of fraudulent claims increased by 13% last year.
Aviva also uncovered more than 11,000 instances of claims fraud last year that were worth more than £122 million.
The insurer also stated that it is investigating a further 16,700 claims for suspected fraud, with increases in the proportion of fraudulent claims detected were seen across its motor, home and liability books of insurance.
In addition, the insurer noted that the number of detected application frauds, including ghost broking, also remains high.
In the report, Aviva advises consumers to be vigilant about unsolicited insurance offers from unusual and unverified sources.
Aviva also added that motor fraud remains to account for 60% of all claims fraud detected by the company in 2021. The insurer also noted that Whiplash Reforms, which came into effect at the end of May 2021, and reduced compensation awards for minor whiplash injuries, are expected to reduce the incidence of motor injury, however they will take some time.
Furthermore, fraudulent claims for home insurance accounted for 13% of claims that Aviva detected, while the number of bogus home insurance claims detected in 2021 increased by 45%, its highest increase in seven years.
Moreover, the most common types of fraud detected were fake claims for accidental damage, accidental loss and theft. The insurer also noted that the average value for a fraudulent household insurance claim in 2021 was £3,645.
Ghost broking, which refers to when an unauthorised person acts as an insurance intermediary and purchases insurance policies using false/misleading information, is also another major contributor to fraud. Out of the 20,000 fraudulent motor policy applications Aviva detected in 2021, 15% accounted for ghost brokers.
Waseem Malik, Chief Claims Officer, Aviva UK General Insurance, commented: “Fraud is typically committed for reasons of need or greed, and we believe the increase in claims fraud last year is linked to reduced incomes during Covid lockdowns.
“As more households and businesses come under increased financial stress due to the cost of living crisis, we expect to see more claims fraud, especially on home, small business and liability insurance policies. Insurance fraud is a crime, and we are continuing to invest in strengthening our fraud defences to protect genuine customers from the impact of fraud and to keep premiums low.”
Malik, also added that Aviva will continue to keep a close eye on motor injury fraud this year, to see if the Whiplash Reforms have any effect on the number of fraud claims.
Meanwhile, fraudulent claims have also been rising within the US, and have become a particular issue in coastal property peak zones, such as Florida.
Furthermore, Aviva recently reported record Q1 general insurance premiums in Q122.