As an insurance broker value customer service, going to great lengths to obtain low cost, high standard car insurance policies for all of our customers. However, not all insurance companies work with the same ethos, with lots of rogue traders making efforts to practice illegally.
The latest organisation to feel the wrath of the law was a six-man company operating in London, quoted to have tried to defraud nearly 6million pounds from the UK insurance industry.
These convictions come off the back of an investigation by the Metropolitan Police Service supported by Zurich Insurance, Direct Line Insurance Group and the Insurance Fraud Bureau.
How they did it
Having set up a claims management company the six men dealt with fraudulent or inflated insurance claims as well as submitting following crash-for-cash collisions, which had been coordinated by them.
Detective chief superintendent Paul Rickett, roads and transport policing command, said: “This was an audacious, criminal act, carried out by unscrupulous people whose sole aim was to line their pockets at the expense of their victims. They did not care whatsoever that their reckless acts endangered the lives of innocent people.
“We are committed to detecting, disrupting and arresting those involved in crime as demonstrated by our thorough and robust investigation, which left no stone unturned in catching these offenders.”
Working together to fight fraud
With some of the UK’s top insurers joining forces with the police the fraudsters had no option but to hold their hands up to the crimes committed, and with a strong focus being places n insurance firms of late we expect news of a long sentencing in October of this year.
Scott Clayton, claims fraud and investigations manager at Zurich Insurance, said: “Convictions such as these demonstrate the value of collaboration between insurers and the Metropolitan Police. We are delighted that the perpetrators of this fraud have been brought to justice.”
Mark Chiappino, counter fraud manager with Direct Line Group, said: “Insurance fraud of this nature is far from a victimless crime and there has been at least one innocent fatality following a “crash-for-cash” incident.
“It is estimated by the Association of British Insurers to add £50 a year to the average household’s insurance premiums, to cover the cost of paying fraudulent insurance claims.”
He added: “At Direct Line Group, we detect and deter as much fraud as possible, from a collaborative approach including sophisticated data analysis, the use of intelligence and highly skilled investigators, across our whole business.
“We work with all law enforcement agencies to assist them in preparing cases for criminal prosecution. Successful prosecutions like this one, protects the wider public from these scams and enables us to protect the premiums of our innocent customers.”
Let us know what you think, is prison a fair penalty?
Following George Osborne’s shocking announcement about the rise in IBT tax we thought we would look into the extent this will affect UK motorists; with such rises eventually costing the policyholder.
Uncovering a rise from 6% to 9.5% the Tories announcement has not gone down well to say the least, with brokers, providers and motorists coming together to form a backlash.
“We are extremely disappointed in this rise, as this will mean insurance for consumers will become more expensive,” said Steve White from the British Insurance Brokers’ Association. “Those hit by this stealth tax will include the 20.1million households with contents insurance, 19.6million with motor insurance, and 17million with buildings insurance.
Will insurance rates go up?
With the government placing more financial pressure on insurers it will not be viable for providers to swallow such costs, having no choice but to work these outlays into their customers’ policies. With an increase meaning a higher rate of people not being able to afford cover the industry may witness more and more insurance driving illegally, choosing not to have a policy at all.
Imran Ahmed, High Gear Director said:
‘Our customers already require support to reach premium prices, with our monthly payment schemes often being a saviour. With further increases in tax we are worried that measures will have to be taken to lower the rates to meet budget’.
‘Also, with more drivers unable to afford insurance we could see more claims on hour hands, with uninsured drivers involved in accidents on the road.
Let us know how you feel about this announcement by leaving your comments below.
Insurance Institute for Highway Safety has rewarded Mercury Montego and Ford Five Hundred cars with a Gold “Top Safety Pick” award when these vehicles were equipped with optional side airbags, while Audi A6 won the Silver award for large cars. Out of these three cars, Montego and the Five Hundred are typically different versions of the same car with unique features. Cars with Gold awards achieved “good” ratings for their front, side and rear-impact protection.
In the round of awards, SUV’s and Pickups were not included as the side impact tests of these cars have not been yet conducted. Of those, five cars have been manufactured by sister-companies Audi and Volkswagen and Audi, which won the Silver awards.
Read the full story here.
Over the past few years as a nation we have gone to great lengths to crack down on insurance fraud, an industry issue that is costing the insurance sector billions each and every year.
Although showing a great preoccupation to catching such fraudsters the Association of British Insurers (ABI) feel these efforts have not been effective in preventing such criminal activity, claiming insurance fraud to be at an all-time high.
ABI say that fake car crashes are helping to push the level of insurance fraud to a record-breaking figure of £1.3bn spent in 2013.
In 2013 we experienced a huge increase in the number of dishonest motorists reported with a rise of 34% of cases reported when compared to 2012 statistics.
There was allegedly close to 60,000 attempts to cheat the claims system last year, costing the insurance industry a whopping £811m.
As a direct result of such unethical drivers the insurance industry has to foot a huge bill each year, having no choice but to increase premiums to accommodate such outgoings. The ABI claims that insurers are changing an extra £50 a year to each household because of the state of the claiming process at present.
Although disheartening for fraud firms that have spend money and time to tackle this issue the industry is showing no sign of stopping, doing all they can to overcome the ‘crash for crash’ culture that the UK has employed.
Malcolm Tarling of the ABI told BBC Radio 4’s Today programme insurers were getting better at detecting fraudulent claims.
But he added: “Everyone pays for fraud. We estimate that across the country fraud adds £50 a year to the average family’s insurance bill – that’s £50 more than people should be paying.
“This is why the industry is investing over £230m a year in tackling fraud.
“The number of detected frauds is rising; that’s because we are getting better at detecting staged accidents. We are going to continue to tackle fraud – that’s what our honest customers expect us to do.”
If you have an opinion on this then please share it with us.
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According to a new report, there has been an increase of 18% in personal injury claims from 2010 to 2011, despite a decline of 11% in the number of accidents. A study by The Institute and Faculty of Actuaries has found that claim rates have risen by almost a fifth in the period of a year with a “clear correlation” between injury hotspots and locations where claim management companies operate.
The “staggering” increase in personal injury claims is the largest ever recorded and has cost insurers an additional £400 million. Locations of claim management companies (CMCs) have recorded higher claim rates, with some areas of the UK overtaking claim rates in the US in 2010.
These “claim clusters” include Liverpool, Sunderland, Wigan, Oldham and Manchester, with the lowest claim rates observed in Aberdeen, Dorchester, Cambridge, Kingston upon Thames, and Exeter.
A whopping 40 percent increase has been recorded for motor insurance premiums since 2010. With the additional costs to the insurance industry between 2010 and 2011, the premiums are predicted to rise further.
Actuaries Chairman David Brown said: “The increase in costs to insurers is likely to result in a rise in motor insurance premiums for drivers.
“The clear correlation between claims management office locations and the ‘hotspots’ for bodily injury claims suggests the two are interlinked. We expect to see legislation coming soon which will affect the way in which these claims management companies do business, which may account for the significant increase seen in 2011 – it is possible this is a last hurrah.”