The volume and value of motor insurance claim frauds fell last year, which also covered the first seven months of the Official Injury Claim portal.
The news came with a call for the Insurance Fraud Taskforce (IFT), whose 2016 report led to several significant changes in legal and insurance practice, to be revived.
Figures published last week by the Association of British Insurers (ABI) said that motor continued to be the most common form of insurance fraud, but the number fell 7% to 49,000 frauds detected, although their value, at £577m, fell by only 1% – an average of £11,775 per claim.
The number of organised motor frauds uncovered at 10,617 rose by 8%. The ABI said this rise in part reflected initiatives by the Insurance Fraud Bureau to tackle ‘crash for cash’ staged motor scams.
The whiplash reforms that came into force on 31 May 2021 were originally sold by the government as a way to reduce fraud, although latterly the focus was simply on reducing the number of claims, by which measure the portal has been effective.
The ABI did not explicitly link the fall in motor fraud with the portal.
It said the number of fraudulent insurance claims overall fell in 2021 by 5% to 89,000 – the lowest figure since 2007 – ad their total value dropped 2% to £1.1bn, the lowest level for a decade. Put together, however, the average scam uncovered was at a record level of £12,283.
Mark Allen, the ABI’s chief fraud and financial crime officer, said: “The fall in reported insurance fraud reflects the industry’s sustained counter-fraud investment and collaborative approach, but no one can lower their guard against the cheats.”
Ben Fletcher, director at the Insurance Fraud Bureau, added: “The insurance industry is working harder than ever to stop fraudsters in their tracks and the fall in scams seen in 2021 is a great reflection of these efforts.
“While we welcome this positive progress, fraud levels are still far too high and countless innocent people sadly continue to be targeted by devastating insurance scams.”
Detective Inspector Andrew Thompson, from the City of London Police’s Insurance Fraud Enforcement Department, said there was “a bumpy road ahead of us, with a predicted rise in fraud due to the cost of living crisis driving people to find other means of financial gain”.
The need for “solid partner-working” between law enforcement and the industry was “more important than ever to prevent an epidemic of insurance fraud”, he said.
Some have since been implemented, albeit not always directly as a result of the IFT – such as strengthening the fining powers of the Solicitors Regulation Authority and lowering the burden of proof in cases that reach the Solicitors Disciplinary Tribunal.
But Matthew Maxwell Scott, executive director of the Association of Consumer Support Organisations, said there has been no industry-wide review of the recommendations to determine how many have been actioned and what the results have been.
Though the value of fraud has fallen 15% between 2016 and 2021, “the cost-of-living crisis risks that fall reversing”, he went on.
“Some of those 26 recommendations have been enacted, such as the whiplash reforms or beefing up CMC regulation, and the Insurance Fraud Bureau is a far more dynamic body now than five years ago.
“But some IFT recommendations have fallen by the wayside, and now that we are facing a cost-of-living crisis, insurers themselves are warning that fraud may well be on the rise again.”
Mr Maxwell Scott continued: “Fraud affects the whole industry, and thus needs industry wide solutions, including from the claimant sector, which is also affected by fraud and needs to do more to combat it.
“The government-backed IFT was groundbreaking in bringing all parties together to tackle fraud for the first time, and eight years on, we think the IFT is needed once again.”