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Published 19 March 2021
DAC Beachcroft’s counter fraud team helped Aviva Insurance avoid paying out over £12m last year on fraudulent motor claims, which would otherwise have impacted premiums for the insurer’s genuine customers.
The DACB motor fraud team investigated and concluded over 2,000 fraudulent claims for its insurer client, rejecting 1,400 claims completely with nothing paid to the claimant and paying out only part of the other 600 claims, because of fraud elements in them.
Within these figures were numerous trial wins, strike outs, fundamental dishonesty findings and criminal sanctions being successfully pursued. Early investigations and proactive handling and evidence-gathering were the key reasons for these results.
“Despite understandable delays with court hearings and the pace of litigation, we worked with Aviva to continue to protect customers from the harmful effects of fraud. Aviva’s zero-tolerance approach to fraud, combined with our innovative methods of fraud identification and handling continue to deliver results for genuine customers,” commented Dan Prince, counter fraud partner at DAC Beachcroft.
New and innovative data-led approaches to identifying claims farming, costs layering and professional enablers were fast-tracked, as was a continued but balanced focus on sanctions and enforcement for the right cases, such as the case of Ryan Fenton who received an eight-month prison sentence, suspended for 12 months.
The year saw significant changes in the type of motor claim being made, with Covid and the forthcoming Whiplash Reforms both factors in this evolution. While the initial lockdown triggered a fall in motor injury claims, cases with a fraudulent element increased both as a proportion of claims received and in variety.
Reduced traffic volumes during the first lockdown caused a fall in opportunistic low-speed impact and fraudulent slam-on claims (‘crash for cash’). However, phantom/bogus passenger claims and claims that were entirely premeditated - whether staged or fabricated, rose by 10%. More widely, Aviva’s claims data for 2020 shows that one-in-nine motor injury claims the insurer received had an element of fraud. Most of these claims were for whiplash.
In addition, motor claims across the industry became more varied and more expensive, especially bolt-on claims for damaged mobile phones and laptops, and the inevitable rise in cost building in credit hire claims (mainly caused by spurious delays with repair times) and loss of earnings. On average, motor injury claims increased in value by an estimated 10% during 2020.
Prince added, "Over the year, we saw a change in the landscape of motor claims with a fraudulent element, and the emergence of concerning new trends. Indeed, lockdown turned static fraud indicators on their head, which meant that we quickly had to develop dynamic ‘lockdown logical’ approaches to the identification of fraud.”
Richard Hiscocks, Director of Motor and Casualty claims at Aviva, commented, “The continued pursuit of injury fraud reminds us of the serious need for the Whiplash Reforms, which come into effect this May. As these results show, Aviva will work with our partners to ensure that we do not pay fraudulent claims, even if we have to spend some money to fight them, and that we will defend our customers and their reputations from the plague of whiplash claims in the UK.
“Motor injury fraud is different from other forms of fraud: it involves organised gangs targeting innocent motorists to deliberately cause accidents, putting motorists at risk of physical harm, and diverts scarce public resources away from real need.”
DAC Beachcroft and Aviva Insurance remain committed to fighting fraud across all claims areas in 2021 but also maintaining the message that fraud is not victimless nor does it have less impact than other acts. Fraud remains an important but challenging claims problem, and innovation and adaptations of approach are key to ensuring results such as the above are repeated.