One in 12 companies believe it is acceptable to exaggerate a motor claim – a move that adds almost 5% on to the cost of a premium for the average business, it is warned.
A syndicate of British insurance-related organisations have commissioned independent research into the extent of the problem and plan to work more closely with industry in a bid to tackle fraud.
This will include compiling risk management packages for fleets which experts claim will cut down on fraud and ultimately reduce premiums.
Glen Marr, a member of the syndicate from Zurich Financial Services, said: ‘This is the first research of its kind and the messages are stark – the £550 million price tag and the fact that 15% of claims are exaggerated highlight the challenge we face as an industry.
‘Fraud is not a victimless crime, it pushes up the cost of insurance for everyone and we know this hits smaller firms particularly hard. We have to protect honest policyholders, as far as possible, from unnecessary rises in premiums.’
Nick Young, a member of the syndicate from Davies Arnold Cooper law firm, said the survey proved that many companies do not regard insurance fraud as a criminal activity.
He added: ‘Fraudsters need to know that, at best, their actions may void their policy, and at worst they risk prosecution and becoming uninsurable. This research gives us some invaluable information on the types of fraud and the nature of the risk, making the problem easier to tackle.’
The research, carried out by MORI, was commissioned by the Association of British Insurers, Capita Insurance Services, Cunningham Lindsey UK, Davies Arnold Cooper Solicitors, NIG, Royal & Sun Alliance and Zurich.
The survey found that: