Insurance sector sees ‘no claims’ fraud soar by a fifth

Opportunistic drivers submitting false ‘no claims’ documents are causing increasing concern for insurance companies following a rise in filings to the National Fraud Database (NFD) in 2023, according to the latest data from Cifas, the UK’s largest not-for-profit fraud prevention service.

UK organisations recorded more incidents of fraudulent conduct in 2023 compared to the previous year, with false applications rising by a fifth (20%) in the insurance sector. There was also a 10% uplift in fake claims – creating an even split between dishonest motor and home insurance claims. Additionally, Cifas data revealed a 45% rise in 21-30-year-olds being filed for false insurance claims.

False ‘no claims’ incidents now account for 9% of false application cases – of which there were more than 19,000 recorded to the NFD in 2023 – compared to 4% in 2022.

Stephen Dalton, Director of Intelligence for Cifas, said: ‘The increasing sophistication of false documents poses a significant challenge for the insurance sector. The ease by which fake websites can be created, and the growth of generative AI and deepfake technology manipulation means that some of these documents are highly convincing and may be capable of bypassing verification checks.

‘While organised crime groups and ghost brokers continue to negatively impact the insurance industry, we’ve seen a rise in opportunistic fraud by individuals making false and exaggerated claims. Submitting a fraudulent car insurance claim can have serious consequences, including invalidating coverage and even result in prosecution.’

Jon Radford, Head of Investigations, Intelligence & Data Services at the Insurance Fraud Bureau, said: ‘Cifas’ findings suggest more people than ever before are chancing insurance fraud, but it's not worth the risk as those responsible will be added to the Insurance Fraud Register and can even face jail time.

‘We’re constantly collaborating with the industry and police to expose new fraud networks and bring scammers to justice. We urge anyone with evidence of an insurance scam to report it to our confidential CheatLine.’

Overall, more than 374,000 cases were recorded to the Cifas NFD, with members preventing £1.8bn in fraud losses in 2023.

Read the Fraudscape 2024 report in full.

ENDS

Notes to Editors

For more information, please contact Hayley Paterson, Cifas Press and PR Manager, on 020 4551 7072 or press@cifas.org.uk.

About Cifas

Cifas is an independent, not-for-profit membership organisation that protects businesses and individuals through effective and secure data and intelligence sharing between the private, public and third sectors. In 2023, Cifas member organisations prevented more than £1.8bn of fraud losses. 

Cifas data is included in the Office of National Statistics England and Wales Crime Statistics of police recorded crime and works alongside law enforcement agencies in tackling fraud.

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Fraudscape

Fraudscape is Cifas' annual report which combines data from its National Fraud Database (NFD) and Insider Threat Database (ITD), alongside intelligence provided by Cifas members, partners, and law enforcement. 

Contact us at press@cifas.org.uk