While the number of detected fraudulent claims fell slightly to 93,900 cases, down 2.7% on 2024, the value of fraudulent activity continued to rise sharply – illustrating its growing scale and sophistication.
The average value of a fraudulent claim reached £14,300 last year – the second-highest level on record, just below the peak of £14,600 recorded in 2022.
Motor insurance remained the area where insurers identified the highest level of claims fraud, accounting for 55% of all detected cases. With 51,900 fraudulent motor claims worth £625 million uncovered during the year, the figures point to fewer but more costly cases, reflecting a shift towards higher severity fraud.1
Property insurance showed a similar year-on-year pattern. The number of detected fraudulent claims fell by 6.2% to 17,700, while their total value rose by 3.4% to £201 million – bringing the average value to a record high of £11,400.
Travel recorded the sharpest increase in volume. Detected cases rose 85% to 4,500, while value increased 16% to £8.6 million. When looking at the types of fraud scammers attempted to commit, exaggerated loss remains the most common, with 26,900 cases identified. This is when someone deliberately attempts to increase the cost of a claim beyond its true value.
Contrived incident and loss fraud saw the largest increase, rising by 30% to around 5,600 cases. These scams involve fraudsters deliberately creating or staging incidents, losses or circumstances in order to make a claim.
Insurers also prevented fraudulent insurance applications worth £1.8 billion last year. Application fraud occurs when information is deliberately misrepresented or withheld in order to obtain insurance cover or reduce premiums. The total number of detected application fraud cases increased significantly, rising by 24% year-on-year.
Head of Fraud and Financial Crime at the ABI: Although the rate of detected insurance fraud fell slightly last year, our data shows that fraudsters are targeting much bigger payouts. As emerging technologies such as AI become more widely available, fraudsters will continue to look for new ways to exploit them. Insurance fraud pushes up costs for everyone, making it more important than ever that as an industry, we continue to work together to detect, prevent and deter fraud across all lines. Anyone considering committing insurance fraud should be under no illusion – it’s a serious crime with serious consequences, including a criminal conviction and imprisonment.
T/ Detective Chief Inspector Simon Klust, Head of the Insurance Fraud Enforcement Department (IFED) at the City of London Police: Insurance fraud is not a victimless crime and those who commit it increase the cost of premiums for honest customers. These figures show that, on average, more than 250 fraudulent insurance claims are detected each day, and this is unfortunately likely to be just the tip of the iceberg. It is therefore important for collaboration across law enforcement and industry to further deepen to help with taking further steps to increase detection of insurance fraud, fight fraud and bring offenders to justice.
Ursula Jallow, Director at the Insurance Fraud Bureau (IFB): The ABI's latest figures show the economic impact of insurance fraud is growing as fraudsters continue to evolve their tactics and exploit new opportunities. Insurance fraud is devastating. It costs honest consumers when times are already tough. Through our IFB Connected to Protect strategy, we're taking every opportunity to collaborate with our members and partners across the public and private sectors to protect more people. By harnessing technology and innovation, strengthening detection and disruption, and raising public awareness of the signs of scams, we're standing together to fight fraud at every level. If anyone has information about insurance fraud, they can report it confidentially through our free CheatLine service.
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