The government’s Insurance Fraud Taskforce has put forward a series of measures to tackle insurance fraud and reduce costs for consumers.
A report, published yesterday (18 January), included recommendations to tackle activity ranging from organised or premeditated crime to opportunistic fraud.
Aiming to improve consumer trust in the insurance sector and raise the public profile of insurance fraud as a criminal activity.
Encouraging greater use of data sharing and collaboration between the insurance sector and regulatory bodies to better prevent organised insurance fraud.
Supporting the government’s intentions to clamp down on unnecessary whiplash claims and strengthen regulation of claims management companies.
Economic Secretary to HM Treasury Harriett Baldwin welcomed the recommendations while speaking at the British Insurance Brokers Association’s parliamentary reception.
She said: “These recommendations will galvanise our collective efforts to tackle insurance fraud and will ultimately reduce costs for consumers.”
The Insurance Fraud Taskforce was set up in January 2015 and its report notes that insurance fraud is not always recognised as criminal activity.
It is therefore vital that the insurance sector takes steps to curb a culture of distrust trust towards the industry and a lack of popular understanding of how insurance works, the document stated.
For example, the taskforce recommended making application and claims forms easier to understand, as well as launching new anti-fraud campaigns.
To ensure these goals are achieved, the taskforce also suggested the government establishes a legacy vehicle to oversee the implementation of its recommendations, while maintaining dialogue between different sectors regarding insurance fraud.
Iain Mills, operational taxes director for Zurich UK Life, said while he welcomed the actions outlined in the report he was disappointed it does not identify specific measures for tackling pension scams.
Mr Mills said: “Pension scams pose a growing threat to consumers and their retirement savings; more action is needed to protect savers and combat illegitimate schemes,” he stated, picking out Recognised Overseas Pension Schemes as the vehicle of choice for scammers.
Tom Conner, director at Drewberry Insurance, said anything, including fraud, that pushes up premiums unnecessarily, will result in a larger proportion of society being unprotected and have devastating financial consequences for those unlucky families that have to cope with parental death or illness.
Roxburgh Financial Management managing director Damian O’Connor added every part of the sales chain should be working together to ensure fraud is curtailed, while of course respecting data security.
He said: “It is important that we stop fraudulent claims because they lead to declined claims and that has an impact of the perception of protection as a whole.”