Press releases

Intermediaries fear home insurance fraud is on the rise.

Steve Philips Head of Fraud Services at Legal & General Insurance
Steve Philips
Head of Fraud Services at
Legal & General Insurance

21 January 2011

Steve Philips Head of Fraud Services at Legal & General Insurance
Steve Philips
Head of Fraud Services at
Legal & General Insurance

New data from Legal & General reveals that over two-thirds of insurance industry intermediaries (69%) think that fraud is getting worse. The FraudStoppers Report found that many brokers and advisers feel that little is being done to deter fraudsters, with more than half (57%) confident that a customer could get away with an inflated claim.

Yet at the same time nearly three-quarters (73%) confess that they have no processes in place to help identify and prevent home insurance fraud. Many of those surveyed who did have processes in place mentioned that these included checking previous insurance cover records and claims history, as well as stressing the importance of educating their clients on what constitutes home insurance fraud and  the implications of making a fraudulent claim.

The overwhelming majority of insurance intermediaries are not aware how much the cost of fraud adds to the average home insurance premium. According to the research, fewer than one in ten insurance intermediaries correctly identified how much fraud adds to the average home insurance premium, with 84% underestimating the impact.

These worrying findings are compounded by consumer data that shows a significant section of the British public think that it is acceptable to commit insurance fraud.  Consumer research also conducted for the FraudStoppers Report found that nearly a third of Brits (29%) think it is acceptable to exaggerate a home insurance claim, for example adding extra items or increasing the value of the amount being claimed.

Insurance fraud adds an extra £44 to the average UK household’s annual insurance bill. Last year, over 2,000 dishonest insurance claims worth more than £16 million were detected every week across the insurance industry.  The value of these claims, at £840 million, rose by 14% on the previous year. 

Steve Phillips, Head of Fraud Services at Legal & General’s general insurance business, said: “Intermediaries have a vital role in helping to reduce home insurance fraud. Given the direct contact they have with their customers, brokers and advisers can contribute to improving customers’ general understanding of what constitutes insurance fraud, the implications of how it impacts them and the serious consequence for their clients if they should commit fraud.

“More people need to appreciate that fraud at any level is not a victimless crime and means additional cost to everyone’s premiums. Intermediaries can really help to reduce the level of exaggerated claims received by explaining to their customers that adding items to their claim or inflating a claim’s value is fraud.

“Legal & General has a zero-tolerance policy on fraud and our success at detecting fraud has helped to maintain premiums for customers.  The FraudStoppers Report highlights how serious the problem is. We pay all valid claims as quickly as possible but we’re totally dedicated to tackling fraud, and catching the cheats. So to prevent their clients from being added to the insurance industry’s fraud databases we need to work together to stop it happening in the first place.”  

Tackling the problem

More than half of consumers (53%) told the Fraudstoppers Report that they want the industry to be tougher on fraudsters.

To help reduce the financial impact of fraud and cost for us all, the Insurance Fraud Bureau (IFB) urges anyone with information on insurance fraud to call or click the IFB's confidential Cheatline - on 0800 328 2550 or

The Fraudstoppers Report outlines more detail on the scale of fraud and the implications which should help advisers when discussing the issue with their clients.


In addition, the report found that a key reason for people committing household insurance fraud is the need to keep up with the latest gadgets and technology. One in ten  consumers surveyed said that they believed there is no harm in using a house insurance policy to try to replace and upgrade to the next generation gadget.  This ‘up-raiding’, trying to commit fraud simply to get the latest technology, is a trend which insurance providers are aware of and they are already catching these potential fraudsters.

With this in mind, Legal & General has also produced a series of videos to demonstrate just how durable many gadgets, like laptops, TVs and phones are.  The videos also demonstrate how successful insurers are at identifying fraudulent claims for these items.

The videos are available to view at and show how common accidents, like stepping on a laptop or hitting a TV with a motion-gaming remote, do not typically cause enough damage to an item to put it beyond repair. Fraudulent claims are often identified by the excessive force that has clearly been used to break an item.

Ortis Deley, co-presenter of Channel Five's The Gadget Show
Ortis Deley, co-presenter of Channel
Five's The Gadget Show

TV presenter Ortis Deley, one of the hosts of The Gadget Show, said: “Some gadgets and electrical goods are seen as a ‘must have’ these days, such as the latest smart phone or high definition television. The staggering pace of technological change makes it hard to keep up with the trends, especially when money is tight. So I can see how ‘up-raiding’ might be considered by some people as an option to upgrade their mobile phone, laptop or HD TV.

Steve Phillips continued: “The vast majority of us do understand that insurance fraud is equivalent to robbing other policyholders, but there appears to be a worrying number of people who are willing to make an inflated claim in order to get the latest gadget. This is committing fraud and is illegal.”

Tougher than you think

The FraudStoppers Report also highlights that, rather than providing an upgraded replacement, in many cases a repair is possible. Repairing items, which is often more environmentally friendly, is frequently preferred by customers who may otherwise lose important data held on their item, as well as also helping to keep costs and so premiums down.
Advisers wanting more information or to discuss fraud detection in more detail should contact their normal Legal & General contact or email

Notes to editors

Research methodology

The consumer research was conducted by Opinion Matters, an independent pan-European market research agency, between 3 and 7 November, 2010.  A total of 1,099 members of the public were polled acr