Insurance fraud will be on the rise due to the credit crunch, several groups have indicated.
Fraudulent travel insurance claims from customers could be on the up as a result of the credit crunch, experts have warned.
Speaking to the Observer newspaper, groups including Direct Line Insurance and security firm Absolute Fraud Management (AFI) said that they expected a rash of demands for payment from "unscrupulous" policyholders. These would involve actions such as "losing" valuables or claiming above and beyond for items that are lost.
ABI has also recently completed a study on the issue, finding that claims were 13 percent higher than usual over the past three months. Chris Price at Direct Line added: "It is generally said that during an economic downturn insurers see an increase of fraudulent claims on their books."
Steve Manton at M Consulting, a firm which specialises in helping the insurance industry, agreed. "With the economy going the way it is, people might claim for smaller losses when, otherwise, they might not have bothered," he explained.
Insurers contacted by the newspaper also said that they were increasing training of employees to make them more aware of the likely spate of claims, and would also be more careful in their analysis of the evidence when a customer claims money. For example, "nervy responses" resulting from customers making phone claims will now be more likely to result in face-to-face interviews than before.
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