Fraudsters Target Property Insurance Claims Amid Cost-of-Living Crisis
As British households continue to feel the squeeze from the soaring cost of living and high interest rates, some are resorting to fraudulent means to make ends meet. New data from Zurich UK reveals an alarming 88% spike in fraudulent property insurance claims over the past two years.
While the number of bogus claims has nearly doubled, the average payout sought by fraudsters is a staggering £19,058.
Zurich has uncovered a total of £78.5 million worth of fraud in 2023 across the business, an increase of 12% or £8 million compared to the previous year. This equates to a staggering £215,117 saved per day from fraudsters’ pockets.
The problem appears to be particularly acute in the property insurance sector, with Zurich investigating 906 property claims for fraud in 2023 – a 44% jump from 2022. More than double the number of property claims were scrutinised for fraud in December compared to the same month in the previous year.
Worrying Trend Among Young Adults
Findings from a YouGov survey commissioned by the Insurance Fraud Bureau (IFB) suggest a troubling trend: a growing number of young adults may be tempted to commit insurance fraud as the cost-of-living crisis deepens.
The survey revealed that one in four young adults aged 18-24 would “likely” consider an act of insurance fraud if they were struggling financially. This marks a significant increase from the previous year when only one in five respondents in this age group expressed a willingness to do so.
Specifically, the 2023 survey found that over 27% of 18-24-year-olds would consider lying on an insurance application to save money if they were in financial difficulty, up from 21% in 2022.
Staying Ahead of Fraudsters
“It’s clear that every year, fraudsters are becoming more sophisticated, sometimes executed by highly organised criminal gangs,” said Scott Clayton, Head of Claims Fraud at Zurich. “While there isn’t a silver bullet, it’s important for every insurer to keep pace by using the latest detection technology, alongside human intervention, to combat fraud and protect the honest customer.”
Detective Chief Inspector Tom Hill from the City of London Police’s Insurance Fraud Enforcement Department (IFED) echoed these concerns, stating, “As food, energy and fuel bills remain high, we understand that exaggerating or fabricating a property insurance claim can seem like a quick way to make money. But pursuing a fraudulent insurance claim has very real consequences.”
He warned that insurance fraud could lead to difficulty securing insurance in the future and even result in a criminal conviction, emphasising that “honest customers end up paying the price” as such fraudulent activities drive up premiums for everyone.
With fraudsters becoming increasingly brazen, it’s clear that businesses stay vigilant to protect consumers and maintain the integrity of the insurance industry.
This has been adapted from an article by Zurich which can be found here.
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