ABI: Fraudulent insurance claims continue to top £1 billion

The ABI has stressed that the fight against fraud must continue as its annual detected fraud data reveals that £1.16 billion worth of fraudulent general insurance claims were identified in 2024 - a 2% increase on the £1.14 billion detected the previous year.  

Insurers uncovered over 98,400 fraud-related claims in 2024, a 12% rise from 81,100 in 2023. 

Motor insurance continues to be the area where insurers see the most illicit claims occurring, and they detected 51,700 motor scams worth £576 million. This is 5% more than in 2023 and represents 53% of the total number claims made throughout the year.    

Breaking motor insurance down, the value of fraudulent claims for domestic policies increased by £36 million (9%) year-on-year, while the figure for commercial policies remained relatively stable – rising by £1.7 million (1.3%). 

Insurers also identified 18,700 deceptive property insurance claims worth £189 million – 11% more than the volume of claims detected during the previous year.   

When looking at the types of fraud scammers attempted to commit, exaggerated loss remains the most common. This is when someone deliberately attempts to increase the cost of a claim beyond its true value. Claims for this type of fraud rose by 10% and amounted to £466 million.  

Alongside this, insurers prevented an estimated 684,800 fraudulent insurance applications, a 7.4% increase from 2023. Application fraud is when important information is purposefully misrepresented or hidden for financial gain when a policy is being incepted.  

Detected and exposed fraud-related cases 

• Ghost broking: Father's Day in court. A father and son were sentenced for operating a fraudulent car insurance scheme. This involved selling fake policies using forged documents and leaving victims uninsured. The scheme generated over £61,000, with part of the proceeds shared between them. A third family member attempted to obstruct the investigation by removing evidence. All three admitted guilt and received various sentences. 

• Home Insurance: Déjà Vu. A man was sentenced to 20 months in prison for eight counts of fraud by false representation, involving multiple fake home insurance claims. This is the second time he has committed similar offences over an eight-year period. He pocketed nearly £12,000 in payouts, using multiple different identities. 

• Watch out: Time's up for these fraudsters. High-value watches linked to theft or insurance fraud were being smuggled overseas to be resold. In response, the Insurance Fraud Enforcement Department [IFED] led a two-day operation at Heathrow Airport, checking watches against a global stolen watch database and advising passengers on how to avoid buying fraudulent items. The initiative aimed to disrupt luxury watch fraud and protect unsuspecting buyers. 

Mark Allen, Head of Fraud and Financial Crime at the ABI, said: “It's reassuring to see the industry making continued progress in tackling fraud, but with insurers continuing to detect over £1 billion worth bogus claims, the fight must continue and there will be no let-up in insurers' pursuit of fraudsters. Fraud doesn't just harm its victims. It drives up premiums for everyone and causes grave emotional distress. That's why cracking down on bogus claims and applications remains a top priority, but fraud can't be tackled in isolation. It needs a collaborative approach alongside those in other sectors. A lot of fraud occurs on social media, and it's vital that technology companies and social media platforms work with us and play their part in prevention and detection.  

“As we mark Fraud Awareness Week, we continue to spotlight the growing threat of fraud and the importance of safeguarding. Fraudsters are increasingly taking more sophisticated, agile approaches, aided by AI. This week serves a reminder that awareness is the first line of defence. For consumers, staying alert and being informed can make all the difference.” 

Nik Jethwa, Detective Chief Inspector at the City of London Police's Insurance Fraud Enforcement Department (IFED), said: “Ghost broking continues to be a serious threat to public safety and trust in the insurance sector. These criminals exploit digital platforms to sell fake policies, leaving victims uninsured and exposed to significant financial and legal consequences. Our officers are actively targeting these offenders through coordinated enforcement, intelligence-led investigations, and close collaboration with industry partners. 

“Recent convictions and proactive operations, such as our work at Heathrow disrupting luxury watch fraud, demonstrate our commitment to tackling organised insurance crime head-on. With fraudulent claims now exceeding £1 billion, our operational focus remains clear: disrupt, deter, and bring offenders to justice.” 

Ursula Jallow, Director at the Insurance Fraud Bureau (IFB), said: "With the ABI reporting a rise in detected fraud, it's more important than ever for the insurance industry to stand together in the fight against fraud. Insurance fraud harms society, and the industry recognises its responsibility to protect honest consumers by continually strengthening its prevention and detection strategies. 

"Through our new five-year strategy, Connected to Protect, we are working with our members to boldly advance the fight against fraud. The strategy harnesses cutting-edge technology, enriched data and intelligence, and unprecedented collaboration across the sector. 

"We are working closely with the ABI, insurers, law enforcement and other key partners to disrupt fraud and shield the public from scams. If you have any information about insurance fraud, we urge you to report it confidentially to our CheatLine."