Fraud rises 88% since 2022
03/11/2024
4 major impacts of cost of living crisis on fraud claims
1. 88% rise in fraud in two years
As the UK continues to grapple with the cost-of-living and high interest rates, new data released from Zurich UK shows that in the last two years alone, fraudulent property insurance claims are a hot spot for fraudsters, soaring by 88%.
2. £19k average claim per fraudster
Whilst the volume of claims has almost doubled, the average claim per fraudster is £19,058. As the insurer strives to keep pace with increasingly sophisticated fraudulent activity to protect the honest customer, detecting these property claims has saved £15.5m in the last year.
3. £78.5 million worth of fraud uncovered
Across the business, the data reveals that in the last year alone, a total of £78.5m worth of fraud was uncovered in bogus claims. This is an extra 12% (£8m) saved from fraudsters compared to 2022, equating to £215,117 a day.
4. 44% increase in claims investigations since 2022
More than double the number of property claims were investigated in December compared to the previous year, according to Zurich. Overall, 906 property claims were referred for investigations in 2023, a 44% increase from 2022.
How the cost of living crisis is affecting this
YouGov findings published by the Insurance Fraud Bureau (IFB) suggest a growing number of young adults could turn to insurance fraud as the cost-of-living crisis deepens.
According to the findings, one in four young adults now say they would ‘likely’ consider an act of insurance fraud if they were struggling financially, a marked increase when compared to the same survey last year.
The 2023 survey found that if struggling financially, over one in four, (27%) 18–24-year-olds would think about lying on an insurance application to save money, this was previously just one in five (21%) in 2022.
What Zurich are doing
Zurich continues to invest and adapt in order to combat the latest trends in fraud by using sophisticated data analytics to identify fraud patterns and networks.
For instance, Zurich uses a data system, Carpe Data, which screens personal injury claims against the internet for any sign of suspicious activity. Alongside this, various investigative tools are utilised to assist with the investigation and validation of claims.
The consequences of fraud
Scott Clayton, Head of Claims Fraud at Zurich, said: “It’s clear that every year fraudsters are becoming more sophisticated, sometimes executed by highly organised criminal gangs. Whilst there isn’t a silver bullet, it’s important for every insurer to keep pace by using the latest detection technology, alongside human intervention, in order to combat fraud and protect the honest customer.”
