‘No claims’ fraud soars by a fifth, according to Cifas

Drivers submitting false ‘no claims’ documents have sparked concerns for insurance companies, following an increase in filings to the National Fraud Database (NFD) in 2023 according to Cifas, the UK’s largest non-profit fraud prevention service.

The latest data from Cifas has revealed that UK firms recorded more incidents of fraudulent conduct in 2023 compared with 2022, with false applications rising by 20%. There was also a 10% uplift in fake claims– creating an even split between dishonest motor and home insurance claims. Additionally, Cifas data revealed a 45% rise in 21-30-year-olds being filed for false insurance claims.

False ‘no claims’ incidents now account for 9% of false application cases, of which there were more than 19,000 recorded to the NFD in 2023 compared to 4% in 2022.

Cifas’ accompanying commentary noted that ‘organisations [had] report[ed] that the rising cost-of-living and everyday expenses means there is greater temptation for individuals to provide false information or omit key details to obtain products and services’, and posited that the rising cost of insurance premiums is ‘a likely driver’ behind the rise in filings for falsified no claims discounts.

Cifas cited findings by Aviva in 2022, which reported that 33% of motorists changed at least one material detail on their application to save money and 27% of motorists said that they would consider lying on an insurance application to save money.

According to Cifa, higher quality falsified identity documents, particularly UK driving licenses) have also been widely reported. In some cases, the same documents were being reused by different groups of perpetrators at high velocity and many commentators predict that the growing sophistication and ease of access to AI generated images will make detecting false identity documents increasingly challenging.

Overall, more than 374,000 cases were recorded to the Cifas NFD, with members preventing £1.8bn in fraud losses in 2023.

Response from Cifas

Cifas Director of intelligence, Stephen Dalton, noted:

“The increasing sophistication of false documents poses a significant challenge for the insurance sector. The ease by which fake websites can be created, and the growth of generative AI and deepfake technology manipulation means that some of these documents are highly convincing and may be capable of bypassing verification checks.

“While organised crime groups and ghost brokers continue to negatively impact the insurance industry, we’ve seen a rise in opportunistic fraud by individuals making false and exaggerated claims. Submitting a fraudulent car insurance claim can have serious consequences, including invalidating coverage and even result in prosecution.”

Jon Radford, Head of Investigations, Intelligence and Data Services at the Insurance Fraud Bureau, said: “Cifas’ findings suggest more people than ever before are chancing insurance fraud, but it’s not worth the risk as those responsible will be added to the Insurance Fraud Register and can even face jail time.

About the author

Rebecca recently joined us in 2024 as a Senior Content Writer and has experience researching and creating multimedia content. With a keen interest in current and emerging industry affairs, Rebecca responds through a critical lens and, by promoting thought and discussion, aims to increase awareness of UKGI’s work.

Get UKGI Insight In Your Inbox

Regular business news and commentary delivered direct to your inbox each week. Sign up here