- Aviva detected £80 million insurance claims fraud, down £10 million on 2017
- Whiplash reforms credited with drop in motor fraud, but value of liability fraud grew by 20%
- Decrease in value of bogus claims more than offset by £29 million of fraudulent insurance applications
The value of fraudulent claims detected by the UK’s largest insurer fell by 11% (£10 million) last year, as Aviva detected £80 million worth of suspect or proven fraudulent general insurance claims in 20181. However, the scale of insurance fraud is still substantial.
fraud uncovered by Aviva
Cracking down on cash-for-crash fraud, better fraud prevention strategies and new legislation in the shape of the Civil Liability Act 2018 (also known as the whiplash reforms), have all forced fraudsters to explore non-whiplash cons such as bogus slip-and-trip claims, according to Aviva.
In an early sign of the potential impact the whiplash reforms could have on motor injury fraud, the value of whiplash fraud detected by Aviva fell by 10%, while organised fraud such as crash for cash fell by 12.5%. Crash for cash includes induced accidents which put the safety of innocent road users at risk. The high levels of fraudulent motor insurance claims have been a significant factor behind spiralling motor insurance premiums in past years.
Aviva led the call for the reforms set out in the Civil Liability Act 2018, and early signs are that fraudsters have seen the writing on the wall and are moving away from whiplash fraud.
While Aviva’s figures represent tangible progress in the fight against motor insurance fraud, the scale of detected claims fraud remains a major issue for genuine customers. Motor insurance still accounts for two-thirds (66%) of all suspected or proven fraud detected by Aviva and one in seven whiplash claims received by Aviva are rejected for suspect or proven fraud.
suspect motor injury claims, currently bering investigated by Aviva
Liability fraud on the rise
Fraud did not decrease across all lines of business, however. The value of fraudulent liability claims such as bogus slip-and-trip accidents made against employer’s liability and public liability insurance policies grew by 20% over 2017 figures.
The average fraudulent liability claim is worth more than £14,000 and Aviva detected nearly £14 million of these scams, including the case of a former law student who pretended to trip over a crate of orange juice in a supermarket and claim for her injuries, the first private prosecution in the UK by an insurance company against a ‘slip-and-trip’ fraudster (see additional cases studies below). Aviva currently has 1,800 suspect liability claims under investigation.
Prevention better than detection
In 2018, Aviva detected 16,700 fraudulent applications, an increase of 20% over 2017’s figures. Aviva believes the fight against fraud starts at the front door and the point of sale, not the point of claim. By detecting fraudulent behaviour and applications with links to known or suspected fraud, Aviva wants to stop fraudsters from accessing insurance products in the first place, preventing future exposure to bogus insurance claims in the future.
Aviva has invested significantly in prevention at the point of quote and sale and now screens all its personal and commercial motor insurance business to prevent fraudsters and gangs from buying policies and going on to submit fraudulent claims. The most common types of application fraud detected by Aviva are ghost broking (where vulnerable customer groups are exploited by rogue agents), payment fraud (such as stolen credit cards) and quote manipulation (where risk factors such as address and driving history are repeatedly changed).
Commenting on the annual fraud figures, Tom Gardiner, Head of Fraud, Aviva UK General Insurance, said, “We are pleased to see that the continued investment and focus we have given to prevention and detection is starting to reduce the impact of fraud for our genuine customers.
“Insurance fraud is still a major issue for customers, with over £80 million of suspect or proven claims fraud detected in 2018, 17,000 total suspect claims under investigation and 16,700 instances of policy fraud. So we must remain vigilant to new threats and continue to defend our honest customers against the cost of fraud.
“We are also working hard to ensure that there are consequences for fraudsters. We have 172 cases currently under investigation with the police, and last year we worked with enforcement agencies to help to prosecute 58 instances of fraud, securing custodial sentences of over 68 years – which we hope will serve as a strong deterrent to people considering insurance fraud in future.”
To learn more about the 2018 fraud figures, take a look at our infographic (PDF 104KB).
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1 Fraud data from Aviva’s UK General Insurance Claims Fraud Intelligence Team for the period 1 January 2018 – 31 December 2018, inclusive.
When Aviva detects fraudulent behaviour, it gathers the necessary evidence and shares with the Insurance Fraud Enforcement Division (IFED), part of the Metropolitan Police, which is tasked with policing insurance fraud. One common factor in most insurance fraud prosecutions is how closely the industry works to share information on known fraudsters so that they can be brought to justice. Below are a few examples of Aviva-led investigations from 2018 which resulted in a successful prosecution and custodial sentence.
Aviva suspected fraud by insurance worker Jack Burton and began an investigation which was ultimately referred to IFED and uncovered nine fraudulent claims against several insurers, including Aviva. Burton pleaded guilty to abusing his position as an insurance claims handler and was sentenced to 12 months in prison.
Aviva suspected fraudulent insurance claims had been made against a policy under his name and a company that was linked to him called Jabur Holding Ltd. Aviva uncovered two bogus household claims and one fraudulent commercial motor insurance claim.
Although Burton provided photographs for the allegedly stolen items, as well as invoices he had altered, Aviva realised the evidence was bogus. Under questioning relating to his claim, Burton became abusive to Aviva’s call centre staff in a failed attempt to try and force the claims through. He even changed his accent to disguise his identity!
The repeat customer
Alexis Brasil was a former Aviva customer who had previously been prosecuted and sentenced for frauds committed against Aviva.
Out of prison on licence and undeterred, Brasil attempted again to defraud Aviva and other insurers via multiple bogus household insurance claims for lost or stolen items such as tablets and phones.
Aviva’s investigations uncovered that Brasil had taken out three separate home insurance policies using different names and addresses in order to make claims on these policies.
Having made one claim with Aviva on 28 October 2013 for £3,409.99, Brasil attempted to make an identical claim through another Aviva policy for the same amount on the same day. Aviva, however, identified the duplication and notified IFED.
Brasil then made an identical claim on a Royal Sun Alliance (RSA) policy. Aviva contacted RSA and established that the claim had been made using identical receipts to those provided to Aviva.
Following a full investigation by IFED which uncovered multiple identities, Brasil pleaded guilty to 17 counts of fraud and money laundering and was sentenced to two years and eight months.
Crash for cash
On 24 June 2014, Rashid Ahmed, from Luton, deliberately slammed on the brakes of his Vauxhall Astra at Dunstable Road, Luton, forcing the car behind to crash into him. Mr Ahmed had alleged that he had been injured as a result of the accident and stated he was slowing down for the traffic ahead before his vehicle was hit from behind.
Aviva's customer was adamant that the incident had not occurred as alleged by Mr Ahmed – it was, in fact, caused by Mr Ahmed slamming his brakes on in the middle of the road for no reason.
As part of its investigations, CCTV footage was obtained that showed the collision occurring. The footage was damning to Mr Ahmed's case, as it clearly showed his vehicle stopping suddenly for no reason. Footage from other cameras further along the road confirmed that there were no vehicles ahead of Mr Ahmed, as he had maintained throughout the case.
Notes to editors:
- Aviva provides life insurance, general insurance, health insurance and asset management to 33 million customers.
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