Insurers on fraud alert as suspicious claims surge

INSURANCE companies are bolstering their fraud investigation teams due to a “significant and worrying” increase in suspicious claims involving high-end luxury cars, lorries and unoccupied properties.

As the recession plunges more and more people into debt, the head of AXA’s fraud investigation team said the firm was “very concerned” about an increase in suspicious claims, especially concerning expensive cars.

Willie McGee, a former Garda fraud squad detective, said he was particularly concerned about fraudulent claims for high-end cars, lorries and property which were on the rise at a significant and worrying rate.

The economic reality people face, he said, meant they were being tempted to burn out top of the range cars they could no longer afford to pay for, or abandon them to make it appear they had been stolen.

The director of FBD insurance, Martin Moran, also confirmed that the firm had recently “beefed up” its fraud team on foot of increases in suspicious claims.

He said there was no doubt insurance fraud was increasing: “Insurance fraud has always been with us but we have had to put more resources into it recently.

“With the downturn, there is a shortage of cash flow, and there are a lot of unoccupied apartments and retail outlets with no income. It puts a strain on people.”

A spokesperson for Quinn Direct said it was remaining “very vigilant” regarding any potential fraud.

Insurance fraud is on the rise globally and according to the Association of British Insurers, 107,000 claims worth a total of £730 million (€820m) were found to be false in 2008, up 30% on the previous year.

CSO crime figures released last week also show a worrying rise in arson offences, which rose by almost 50% in the first quarter of the year compared to the same period in 2008.

Mr McGee said there is an obvious “knock-on effect [on premiums] from fraudulent claims”.

“There is a perception that insurance fraud is a victimless crime, but it is not. We are here to protect the interests of our customers.”

Another recent trend, Mr McGee added, is the rise in the number of forged driving licences.

“We are seeing forgeries coming in from all over Europe. We are working closely with the gardaí and have issued branches with lamps to detect the false documents,” he said.

Mr McGee emphasised people had nothing to worry about when lodging a claim for legitimate losses.