Thompsons Solicitors is calling on the Associations of British Insurers (ABI) to clarify their stance on alleged insurance fraud following a series of inconsistent, misleading and unsupported arguments about levels of fraud in the UK.

The ABI today (30.05.14) released a series of inflammatory figures which seek to paint a picture of mass insurance fraud in what the UK’s leading claimant-only law firm, Thompsons, is claiming is a blatant attempt to advance their cause with government to place further restrictions on access to justice.

Figures don’t stack up

Judith Gledhill, of Thompsons Solicitors said: “This is a line the insurers have been peddling for a long time.

“Groups like the ABI take great pains to paint a picture of a ‘compensation culture’ and mass fraud but as ever, their figures don’t stack up.

“We are raising these concerns publicly and challenging the ABI to respond because it’s precisely these sorts of figures that are increasingly becoming the basis for public policy decisions and changes to UK law. It’s vital that figures put out by bodies like the ABI are – considering their wider implications for the people of the UK - transparently compiled and independently verified which right now, isn’t happening.”

Figures released by the ABI and the Insurance Fraud Enforcement Department state that there were as many as 59,900 ‘dishonest’ motor claims ‘detected’ in 2013 but that only 85 people had been prosecuted since 2011.

“If the ABI’s figures are accurate and if we are in fact in the midst of a fraud epidemic, it begs the question why there are so few prosecutions?” continued Judith.

“The way this latest announcement reads you’d think that thousands of people were running around every day committing fraud. You’d also been forgiven for thinking that insurers have paid out millions of pounds to dishonest policy holders when, in fact, the only multimillion pound payments they’re making is to their own shareholders.

“The fact is, the insurers are crying crisis because it helps them politically and no one is challenging the accuracy of what they say.”

Massive dividend pay-outs

Thompsons is today calling for the ABI to be clear on:

  • How many so-called ‘bogus frauds’ have actually resulted in financial payments being made?
  • What research is available to support the claim that it has ‘detected’ 59,900 bogus motor fraud claims in 2013?
  • Exactly how much money was paid out by insurers for motor insurance claims in 2013 – and not just how much ‘would have been paid’ had the fraud not been detected?
  • What is their criteria for classing a claim as ‘fraudulent’ and will they counter the argument that some insurers will class a claim as fraudulent based on clerical errors such as typing mistakes in the policy holder’s submission?

A series of reports compiled by Thompsons has revealed that while insurers claim to be victims of a ‘compensation culture’ built on fraud, they have admitted that they have benefited from the ‘claims environment’.

Premium prices continue to be inflated allowing the UK’s car insurers to make over £2 billion in profit in 2013 and allocate most of this to massive dividend pay-outs to their shareholders.