Tel: 01992 471001
The level of claims exaggeration by would-be fraudsters has increased dramatically since last year, according to new data released by VFM.
On average, dishonest household insurance policyholders added £3,287 to their claims, a 77% increase on the last quarter of 2012 (£1,849).
The data were compiled by VFM from fraud investigations carried out on behalf of several insurers.
In a technique dubbed conversational management, VFM investigators ask for detailed information from policyholders suspected of adding extra items onto a legitimate claim, or inventing a claim entirely. After the conversation VFM says many opportunistic fraudsters withdraw their claim.
About 70% of the household claims that go through VFM’s conversation management process are passed back to the insurer’s client as genuine. One quarter are voluntarily withdrawn by the customer and 4% repudiated due to fraud or indemnity issues.
“We’re dealing with the people who pick up the phone and think it’s easy to make a claim”, said director Sally Griffiths. They think that if the opportunity presents itself they might make a fraudulent claim, for example they might have been burgled and decide to inflate their claim or add some items onto it.
We can positively influence their behaviour and make them think do I really want to tell all these lies and send in a claim with my name on it?
Griffiths said insurers are dedicating more resources to investigate lower value claims, which make up the bulk of fraudulent insurance claims. They don’t want to allow policy holders to think it’s an easy win, she said.
For multiple-item claims which were partially withdrawn or repudiated, the average fraudulent addition was 8% of the total claim submitted, VFM reported.
Since the beginning of the year £3.4m-worth of claims has been dropped by policyholders or repudiated by insurers after a conversation with VFM.
VFM Fraud Index
Ranking fraudulent claims by volume Type of claim Average claim value (Q2 2013) Average claim value (Q1 2013) Average claim value (Q4 2012)
1 Multiple items £3,287.95 £3,099.45 £1,848.99
2 Jewellery £3,016.44 £2,698.74 £2,179,70
3 TVs £534.20 £549.57 £453.78
4 Laptops £774.09 £718.08 £572.33
5 iPhones £402.45 £409.89 £394.27
Step 1
The easiest way to start your list of belongings is to take out your phone and start videoing or taking photos …
26 Feb 2021
Everyone has possessions that they feel are irreplaceable. When insuring your home, it’s easy to focus on these “priceless” items. However, do …
26 Feb 2021
We are now entering the second month of the third lockdown and indications are that we are at least another month away …
9 Feb 2021