Major motor insurance company, Aviva has been embarrassingly caught out for contradicting their own industry’s figures, after it was revealed that just 2% of claims involving motor accidents are fraudulent.
Aviva had insisted that the cost of frauds is ever-increasing and released figures showing that insurance fraud worth more than £110m had been detected in 2013, signifying an increase of 19% in 2012.
But the losses from insurance fraud are a fraction of the total settlements agreed by the insurer and their own figures seem to contradict the insistence of the insurance industry that 7% of claims relating to motoring are in fact fraudulent.
Speaking on behalf of Aviva was head of fraud, Tom Gardiner, who said: “Our priority is to pay genuine claims quickly and fairly, while offering a great service to our customers. Last year, in the UK, for example, Aviva settled over 910,000 claims worth £2.65bn. We identified fraud on less than 1.9% of claims we received.
“However, a combination of factors, including the economic climate, social attitudes toward insurance fraud as a ‘victimless crime’, and a lack of effective deterrents are increasing the frequency of insurance fraud.”
He went on to state that there was a growing trend towards fraud in third party cases, where one in nine were found to be fraudulent.
The admission by Aviva will make interesting reading for the claimant lobby, especially as the insurer was campaigning for the removal of legal representation from small claims of this nature earlier in the year.
Tom Jones, the head of policy and public affairs from national claimant firm Thompsons Solicitors has already hit out at the insurers, claiming that they were inflating the problem of fraud and the admission by Aviva will certainly go a long way to support this viewpoint.
He said earlier this month: “We hear car insurers constantly portraying themselves as victims of ‘compensation culture’ and ‘whiplash fraud’, yet the reality is that they are making mouth-watering profits from motorists and paying most of it out in dividends.
“The truth is that the insurers exaggerated the problem of fraud to secure legal changes and now they’re reaping the benefits through what they themselves are calling an ‘excellent’ claims environment.”
One thing is for sure there is a sufficient difference between the 7% being quoted by the insurance industry and the 2% released as fact by one of their own major firms and this certainly should not be ignored by the government when the debate on further reforms to the small claims industry is risen.