Only a third - 32%, of intermediaries are ’somewhat clear’ on exactly what constitutes insurance fraud, shows research conducted by Legal & General as part of its FraudStoppers campaign.
Figures from the FraudStoppers report highlighted that more than half, 57% of intermediaries think that people can get away with an inflated claim and a quarter, 26% of intermediaries believe that house insurance claims are exaggerated by 25% or more.
In addition, two thirds, 67%, of insurance intermediaries don’t believe that insurance fraud can be stamped out and worryingly, almost three quarters, 74% of insurance intermediaries feel that the recession has made insurance fraud a bigger problem.
Legal & General general insurance has developed support material for intermediaries to help them and their clients, understand the impact and consequences of committing insurance fraud.
This includes a video, which is available to view online featuring interviews with industry figureheads from Wesleyan Financial Services, Honister Capital, LSL Group and Positive Solutions discussing how intermediaries can help to tackle fraud, and how the industry can work together in the future to improve the situation.
The video also captures reactions from the intermediaries when they find out that insurance fraud adds an extra £44 to the average UK household’s annual insurance bill.
Last year, over 2,000 dishonest insurance claims worth more than £16m were detected every week across the insurance industry. The value of these claims, at £840m, rose by 14% on the previous year.
Steve Phillips, head of fraud services at Legal & General’s general insurance business, says: “Our FraudStoppers report highlights just what a big problem fraud is for the industry. What was encouraging was that nearly half, 43% of intermediaries have faith in the industry’s detection efforts to stop people inflating or falsifying clams.
“However we need to improve fraud detection rates so that honest customers do not continue to pick up the bill as the cost of fraud means that an additional amount is added to everyone’s home insurance premium.
“The direct contact and ongoing relationship that intermediaries have with their customers, means they are best placed to improve clients’ understanding of the implications of insurance fraud. The information we now have available and on the special Fraudstoppers site will also help intermediaries to check and question anything that they don’t think looks right.”