Property insurance fraud leaps by a third as cost of living challenge fuels surge in bogus claims

Leading insurer Zurich UK foiled nearly £200,000 worth of fraud every day last year as cost of living challenges spurred a surge in bogus claims.

The insurer detected a 31% increase in fraudulent property claims in 2022 and a 7% rise in fake casualty claims.

This comes as added pressure on household finances leads more to turn to fraud, with the Insurance Fraud Bureau seeing a 17% increase in names added to its register of fraudsters in the 12 months to July last year¹.

Overall, Zurich prevented some 3,460 fraudulent claims last year, worth roughly £20,000 per claim. The total value of fraud prevented was £71.5million, averaging £195,890 a day.

Despite an increase in organised motor fraud and bent metal claims, a significant reduction in spurious whiplash claims led to a 20% drop in motor fraud, Zurich’s market data reveals.

Scott Clayton, Head of Claims Fraud at Zurich, said:

“Households continue to face financial strains due to the cost of living crisis, and unfortunately this has led to an uptick in insurance fraud.

“Fraudsters are continually evolving in their methods, but so are we, and we now have more tools in our arsenal to detect fraud than ever before. Fraudulent claimants should be aware of the real-world consequences of their actions, which can include criminal prosecution and prison sentences for those caught.”

Detective Chief Inspector Tom Hill, from the City of London Police’s Insurance Fraud Enforcement Department (IFED), said:

“We understand that the rising cost of living has presented challenges for many people across the country – but turning to crime is never the answer.

“Submitting a bogus insurance claim may seem like a victimless crime, but it in fact drives up the cost of premiums for everyone. As well as this, it could land you with a criminal record. Exaggerating or fabricating a claim may seem like a quick way to make money, but a conviction will have a lasting impact on your life.”

Zurich continues to employ cutting edge fraud detection technology to help protect honest policyholders. The insurer has invested in new software to uncover fraudsters who attempt to hide their identity by providing false name or address details, and last year launched real-time fraud checks to help speed up the claims handling process.

Case studies

More details available upon request

Hatching a plan: A man who claimed to catch chickens for a living was ordered to pay £17,000 when his fraudulent claim came home to roost.

The fraudster, who had falsely claimed to have tripped on a raised water cover, was added to the Insurance Fraud Register after three of his online connections were found to have made the same claim.

A step too far: A woman claimed to have sustained injuries to her foot when a poorly stitched pair of shoes caused her to fall. However, metadata in photos sent to Zurich showed that the injury had been sustained four months before the alleged incident.

When challenged, the policyholder withdrew her claim in its entirety and agreed to pay a contribution to Zurich’s investigation costs.

The thin blue lie: A serving police officer felt the strong arm of the law after being caught fabricating a claim for two stolen bikes.

After an investigation discovered that two bikes allegedly stolen from her shed had never existed, the officer’s husband tried to take the fall. But further analysis showed that the couple had specified the two bikes on their policy, proving the fraud was pre-planned.

Following the investigation, the fraudster was dismissed from the police for gross misconduct and her husband was given a caution.

¹https://www.claimsmag.co.uk/2022/07/ifb-launches-anti-fraud-campaign-as-insurance-fraud-register-additions-increase/20075