Norwich Union identifies insurance frauds which could have cost it £150m

Norwich Union's fraud-detection systems identified 20,000 bogus claims last year, worth a total of about £150m.

And the insurer said the cost of the growing culture of dishonesty in society would ultimately be borne by consumers, via higher premiums.

The results of the NU research were revealed in a behind-the-scenes Channel 4 documentary.

The expose - Scams, Fiddles and Honest Claims - was filmed over two years and had unprecedented access to NU's special investigations unit. It follows both the fraud investigators and the human stories of the policyholders being investigated.

“As much as 60pc of all insurance fraud is committed by 'opportunistic fraudsters' who tend to be motivated by a belief that everyone else is at it or by a concern that they will not be paid the full value by their insurer,” said Dominic Clayden, NU's director of claims.

“These concerns are in fact entirely misplaced. Our priority is to pay genuine claims in full, as quickly as possible.”

Mr Clayden added: “Last year, NU identified and denied 20,000 fraudulent claims, worth approximately £150m.

“Not many people realise that if any part of their claim can be shown to be fraudulent the whole claim is potentially invalidated and they risk not receiving any payment at all.

“The fact is that claims costs drive future premiums, and consequently the more fraudulent claims there are, the more premiums must be inflated for the honest, law-abiding majority.

“Put simply, a more honest society would mean less expensive insurance. Until this happens, fraud prevention must be an increasingly central part of all insurers' business models.”

Across the industry, as many as 10pc of all insurance claims are thought to be false, representing a cost of more than £1.6bn a year.

NU said that dishonest claimants were pushing up the cost of premiums by an average of nearly £40.

Paul Kiff, a criminologist who helped NU with its research, said: “The study shows that people think dishonesty has become widespread, which can make what they perceive to be small acts of dishonesty justifiable and socially acceptable in their minds.

“Paradoxically, the perception that society is more dishonest than ever appears to influence individuals to participate in fraudulent or dishonest acts themselves, thereby directly contributing to an increase in fraud.”

The research suggests that 75pc of adults believe that dishonesty is rife, and almost half believe that the UK has seen a significant shift in attitudes over the past decade.

But despite people's distaste at these developments, as many as 7pc of people admit to falsely reporting a mobile phone as lost or stolen in order to get a free upgrade, exaggerating a claim, or concealing an accident record in order to get a lower car insurance quote.

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