Legal & General help intermediaries to tackle fraud.
07 June 2011
Research conducted by Legal & General as part of its Fraudstoppers campaign, highlighted that only a third (32%) of intermediaries are only “somewhat clear” on exactly what constitutes insurance fraud.
Insurance fraud is one of the biggest challenges for insurance companies as amazingly many people don’t associate exaggerating insurance claims or falsifying claims as fraud. Figures from the FraudStoppers report highlighted that more than half (57%) of intermediaries think that people can get away with an inflated claim and a quarter (26%) of intermediaries believe that house insurance claims are exaggerated by 25% or more.
In addition, two thirds (67%) of insurance intermediaries don’t believe that insurance fraud can be stamped out and worryingly, almost three quarters (74%) of insurance intermediaries feel that the recession has made insurance fraud a bigger problem.
So responding to these findings and as part of Legal & General’s commitment to tackle insurance fraud, Legal & General general insurance has developed support material for intermediaries to help them and their clients, understand the impact and consequences of committing insurance fraud.
This includes a video, which is available to view online featuring interviews with industry figureheads from Wesleyan Financial Services, Honister Capital, LSL Group and Positive Solutions discussing how intermediaries can help to tackle fraud, and how the industry can work together in the future to improve the situation.
The video also captures reactions from the intermediaries when they find out that 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: “Our FraudStoppers report highlights just what a big problem fraud is for the industry. What was encouraging was that nearly half, (43%) of intermediaries have faith in the industry’s detection efforts to stop people inflating or falsifying clams. However we need to improve fraud detection rates so that honest customers do not continue to pick up the bill as the cost of fraud means that an additional amount is added to everyone’s home insurance premium.
The direct contact and ongoing relationship that intermediaries have with their customers, means they are best placed to improve clients’ understanding of the implications of insurance fraud. The information we now have available and on the special Fraudstoppers site will also help intermediaries to check and question anything that they don’t think looks right.
Working together with intermediaries and their clients, will hopefully help to get the message out that fraud does not pay, it should reduce the cost of home insurance and make any fraudsters think twice.”
Legal & General pays all valid claims as quickly as possible and has one of the best fraud detection rates in the business.
Advisers wanting more information on fraud should go to http://www.legalandgeneral.com/tacklinginsurancefraud/ or contact their normal Legal & General contact or email email@example.com.
Available on the Fraudstoppers site are:
FraudStoppers videos interviews with:
- Steve Phillips, Head of Fraud Services, Legal & General
- Mark Lee, Business Development Manager, Wesleyan Financial Services
- Chris Seery, Group Mortgage Manager, Honister Capital
- Kay Leslie, Compliance Director, LSL Financial Services Division
- Paul Rignall, Mortgage Manager, Positive Solutions
Consumer videos: Feature an independent panel of people who were recorded in conjunction with SBS Insurance Services, a leading claims fulfilment company and one of the fraud specialists used by Legal & General, demonstrating common fraudulent claims:
- Damage caused when slamming a laptop lid
- Damage caused by screen punctured by sharp object
- Damage caused to a dropped laptop
- Damage caused to the hinges of a laptop
- Damage caused to a laptop by liquid
- Damage caused by an object being thrown at a Flat Screen TV
- Damage caused by the TV dropping to the floor
- Damage caused by an iPhone being dropped
Notes to editors
An email survey of 257 insurance industry intermediaries was conducted by Legal & General, between 1 and 15 December, 2010.
Consumer research of 1,099 members of the public, polled across the country, was conducted by Opinion Matters between 3 and 7 November, 2010.
For more information on SBS Insurance Services, please visit http://www.sbs-claims.co.uk/
Further information on repair and replacement: A home insurance policy is not designed to repair or replace items when they break down, but does provide cover if household items need to be repaired or replaced where there has been an event that is covered under the policy such as flood, fire or theft. Items that are not repairable are normally replaced on a ‘new for old’ basis. For example, in the event of loss or damage to a TV, Legal & General will replace this with an identical model or if not available, one of comparable quality.
The insurance industry has come together to establish a confidential number run by the Insurance Fraud Bureau. Members of the public or insurance professionals are able to report anyone they suspect of carrying out fraudulent activity against an insurer including those making a false or deliberately exaggerated home insurance claim or staging an incident that may or will result in a claim being made.
Please call the IFB Cheatline number is 0800 328 2550 or report online at www.insurancefraudbureau.org/cheatline/.
1. The information contained in this press release is intended solely for journalists and should not be used by consumers to make financial decisions. Full consumer product information can be found at www.legalandgeneral.com/home-insurance or b