Insurance News Archive
New agency to take on insurance fraud
The insurance industry is to set up an independent body to tackle insurance fraud.
The Insurance Fraud Bureau (IFB) will work with the police and insurance companies to cut bogus claims that are thought to cost £1.5 billion a year.
Malcolm Tarling, spokesman for the Assocation of British Insurers, said: "All types of insurance fraud impact in a number of ways.
"First they push up the cost for honest customers. Secondly, because the insurers have to investigate the claims, it can delay the settlement of otherwise genuine claims.
"And thirdly, especially with organised fraud, increasingly innocent lives have been put in danger. If you are involved in an accident that somebody else has staged, that is dangerous."
Mr Tarling explained that the IFB will search insurance company databases for patterns of fraud and have greater resources than any single insurance company to carry out investigations.
He added: "Up until now, organised fraud was largely depending on individual insurance companies' lack of investigation. They haven't had the time, the expertise or the resources to fully investigate all potential organised fraud. Now they will have through the IFB."
The new agency has also been welcomed by the British Insurance Brokers' Association (BIBA).
BIBA chief executive Eric Galbraith said: "Some people just think they will inflate their claim or they will just change the circumstances to make it a claim, and they see that as an easy option. And we all have to pay for those claims.
"Everybody is affected by it and it's a very serious matter. We have to change people's perception of it so they understand that it does impact everyone."
26 Jul 2006