Insurer reports rise in fraudulent claims as inflation spikes

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Britons are increasingly turning to fraud to cope with the cost of living crisis, according to one of Europe’s biggest insurers.

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Zurich UK reported a 25% jump in bogus insurance claims in the first five months of 2022, compared to the same period a year ago, a surge it said comes as households and businesses suffer under increased financial strain.

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“Sadly, many more people are facing hardships as a result of the cost of living crisis, which is contributing to an increase in fraudulent claims,” said Scott Clayton, head of claims fraud at Zurich UK, a division of the Swiss insurance group ZURN handjob
+0.71%,

The insurer said it prevented fraud amounting to £4.2 million ($5.1 million) – up from £3.3 million over the same period in 2021. This equates to more than £40,000 a day, with the average value of a fraudulent home insurance claim of £ 8,800 ($10,600).

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The most common items fraudsters said were stolen, lost or damaged were TVs, mobile phones and expensive jewellery.

“We understand that the rising cost of living has made the past few months particularly hard for many people across the country – but turning to crime is never the answer,” said detective chief inspector Tom Hill, from the City of London’s insurance fraud enforcement department .

Aviva AV,
+1.28%,
a UK insurer, said in May that home insurance fraud jumped by 45% in 2021, though it suggested this related to reduced incomes during COVID lockdowns.

Like Aviva, Zurich said it was adopting more technology to stop cheats. It has invested in NetReveal software that it said uses complex algorithms and data analytics to uncover fraudsters trying to hide their identity by providing false name or address details.

“We’re there for our customers when they need us, and last year paid £2 billion in claims. But as well as paying valid claims, we remain vigilant against fraud,” said Clayton.

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Credit: www.marketwatch.com /

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