Insurance · 19 January 2016

Insurance fraud taskforce recommends tougher action on suspicious claims

Insurance fraud taskforce
Small business owners would be 25 per cent more likely to make a fraudulent claim on their business insurance than through a personal policy
A government insurancefraud taskforce has concluded that the industry needs to take harsheraction on fraudulent and exaggerated claims thought to cost policyholders an extra 50 per year.

these recommendations will galvanise our collective efforts to tackle insurance fraud and will ultimately reduce costs for consumers, said Harriett Baldwin, economic secretary to the Treasury.

Research carried out by AXA in 2013 suggested that small business owners were risking financial and criminal penalties through relaxed attitudes to insurance fraud.

The report found that one in ten SME leaders believe it is acceptable to inflate the value of goods stolen on an insurance claim.

The same survey revealed that small business owners would be 25 per cent more likely to make a fraudulent claim on their business insurance than through a personal insurance plan.

Matthew Reed, managing director of AXA’s commercial intermediary arm, warned insurers:

if a broker does identify any client trying to inflate a claim, for example, we would urge them try to persuade them that it is in their long-term interest to do otherwise.

after all, they not only run the risk of having any claim turned down, but also, in serious instances, risk criminal proceedings and problems getting any insurance in the future.

However, a review into the provision of insurance for SMEs carried out by the Financial Conduct Authority (FCA) in 2015 highlighted a different view of the relationships between small firms and insurers, concluding that the claims service is not consistently working in the interests of many small businesses.


 
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Hannah Wilkinson is a reporter for Business Advice. She studied economics and management at Oxford University and prior to joining Business Advice wrote for Kensington and Chelsea Today about business and economics as well as running a tutoring company.

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