Fraudulent whiplash claims contributed to a 2% rise in motor insurance fraud last year, according to the Association of British Insurers’ latest report on insurance fraud.

The report identifies that in 2011 7% of all motor insurance claims were fraudulent compared to 5% in 2010.

The ABI says that this reflects the rise in fraudulent whiplash claims, often encouraged by a small minority of corrupt professionals.

Its latest figures suggest that motor insurance is the biggest area of insurance fraud with savings of £541 million being made as a result of uncovering 45,000 bogus claims.

Examples of detected frauds uncovered include:

• Insurers, working with Bedfordshire Police and assisted by the Insurance Fraud Bureau, helped uncover a staged motor accident gang that it was believed were involved in 180 staged and induced accidents, linked to 230 insurance claims, worth £3.2 million. In total 37 people received prison sentences.
• A group of 30 men, who hired a coach to take them greyhound racing all claimed whiplash following a staged accident with the car behind which they had arranged beforehand.

Launch of insurance fraud register

The insurance industry has launched an insurance fraud register which will contain details of all known insurance fraudsters through a secure protocol, making it easier for insurers to prevent fraud.

Otto Thoresen, ABI's director general, said: "From the highly organised ‘crash for cash' motor scams to the opportunistic exaggeration of a genuine claim, insurers are determined to do what it takes to protect honest customers.

"The development of the Insurance Fraud Register marks a milestone in the fight against fraud.

"It reinforces the strong message that insurance cheats can expect difficulties in obtaining future insurance, credit and other financial products, as well as getting a criminal record."