Insurers Detect £1.34 Billion in Fraudulent Claims

Insurers detected £1.34 billion worth of fraudulent insurance claims in 2025, marking a 14% increase on the £1.18 billion recorded the year prior. The average value of these bogus claims reached £14,300, the second highest level recorded by the Association of British Insurers (ABI) since 2004. Despite the rise in value, the total number of detected fraudulent claims saw a slight decrease of 2.7% to 93,900 cases.

Motor and Travel Insurance Fraud Trends

Motor insurance constituted the largest portion of detected fraud, accounting for 55% of cases with 51,900 claims valued at £625 million. The average value of a detected motor fraud claim was approximately £12,000. In contrast, travel insurance fraud experienced a significant surge, with detected cases increasing by 85% to 4,500. The value of these travel insurance frauds rose by 16% to £8.6 million.

Property insurance claims saw a 6.2% annual decrease in detected cases, falling to 17,700. However, the average value of a fraudulent property insurance claim reached a record high of £11,400. Exaggerated losses remained the most common type of fraud attempted, identified in 26,900 cases. Contrived incident and loss fraud, where incidents are deliberately staged, also saw a 30% increase to around 5,600 cases.

Industry Response and Consequences

Mark Allen, head of fraud and financial crime at the ABI, stated that while the rate of detected fraud fell slightly, fraudsters are targeting larger payouts. He warned that emerging technologies like AI could be exploited by criminals. Allen emphasised that insurance fraud increases costs for everyone and that the industry must collaborate to detect and deter such activities. He added that committing insurance fraud is a serious crime with consequences including criminal conviction and imprisonment.

Temporary detective chief inspector Simon Klust, head of the Insurance Fraud Enforcement Department (IFED) at the City of London Police, highlighted that insurance fraud is not a victimless crime and increases premiums for honest customers. He noted that over 250 fraudulent claims are detected daily, suggesting this is likely only a fraction of the total. Klust stressed the importance of collaboration between law enforcement and industry to enhance fraud detection and prosecution.

The ABI also reported that insurers prevented fraudulent insurance applications worth £1.8 billion in 2025. Application fraud occurs when individuals deliberately misrepresent or withhold information to obtain insurance cover or reduce premiums.