Insurance Fraudsters: A study for the ABI.

Previous studies of insurance fraud have perceived the crime as easy to commit, easily justified by those who do so (seeing insurers as ‘fair game’), and with a low chance of detection. Police interest has typically been perceived to be low.

Although there are a range of studies of fraudsters, insurance fraudsters have largely escaped research attention. Little is known about their perceptions of the risks involved and why they choose to commit insurance frauds over other types of offences.

The offences discussed by opportunistic insurance fraudsters were characterised by being spur of the moment decisions with little planning (and therefore involving no direct attempts to target an insurer), but being instigated because of a chance occurrence and a need and/or desire for money.

Opportunities arose when a legitimate claim was being made and there was a chance to claim for more than legally entitled; when others introduced the idea; when it was easy to do; and because sometimes the fraudster was emotionally unstable. The opportunity to make money was a key driver.

Given the lack of planning, the fraudsters did not consider the risk factors; concerns about getting caught before the offence took place did not feature prominently.

None of the opportunistic insurance fraudsters claimed they had gained from their offences, moreover they said they suffered additional consequences beyond the caution or sentence they received. This included an adverse family reaction, financial consequences, and the stigma involved in being categorised as an offender.

In acting quickly and without thought insurance fraudsters made mistakes. They were subsequently caught due to a variety of factors, including good work by insurers and the police. Some claimed they did not understand their policies.

There seems much to be gained by highlighting the fact that opportunistic insurance fraudsters do get caught, and that there are consequences beyond those that stem from the conviction; and in

reminding the public generally and policyholders specifically that insurance fraud has consequences and is not a victimless crime.

Four individuals who were drawn into insurance frauds in different ways were interviewed.

Lee became a ghost broker principally because it provided an easy way of deceiving people without them realising it. He exploited a range of loopholes including ignorance and carelessness amongst those he sold policies to.

Matt orchestrated fraud from inside an insurance company. He had an addiction he could not deal with and was able to exploit

Perpetuity Research and Consultancy International Ltd his inside knowledge with the help of colleagues and a friend who permitted fraudulent claims on his policy.

Ahmed claimed to be ignorant and a victim himself of an organised gang of insurance fraudsters, although he was convicted of several offences.

Alan was caught up in the police response to an organised gang of insurance fraudsters. He was innocent of the organised offences although he pleaded guilty to involvement in a different

insurance related offence, albeit a minor one.

The case studies highlight the ways in which fraudsters exploit public ignorance and carelessness and lax policies and practices by insurers, and the dangers for those who come too close to organised offences.

They highlight the importance to those responsible for prevention to be continually on their guard, and on the ball, as offenders seek and exploit a range of easy opportunities.