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UK insurer Zurich blames cost-of-living crisis for rising fraud

The number of false property claims rose by 25%.

Data shows that an increasing number of financially stressed households are “resorting to crime” by filing fake insurance claims, with a dramatic increase in incidents over the past year.

The cost-of-living problem, according to Zurich UK, one of the UK’s largest insurers, is fuelling an upsurge in insurance fraud, in which customers overstate or fabricate claims for products such as jewels and electrical equipment.

According to the firm, the number of false property claims from January 1 to May 31 this year was 25% more than at the same time in 2021.

During the five months, the insurance averted £4.2 million in fraud, up from £3.3 million in 2021. Zurich UK estimated that this amounted to around £40,000 each business day.

The most common things fraudulently alleged to have been lost, stolen, or damaged were high-value jewellery, mobile phones, and televisions. A false house insurance claim was worth an average of £8,800.

In one case, a rider drew suspicion after filing a £1,000 claim for a stolen bike just minutes after purchasing a policy, according to Zurich UK. But she was shocked when mobile phone footage showed the alleged burglar fleeing with the bike 45 minutes before the cover was taken.

According to Zurich UK, many more people are encountering difficulties due to rising food, electricity, and fuel prices, contributing to a rise in bogus claims.

DCI “We realize that the growing cost of living has rendered the recent months particularly difficult for many people across the nation,” said Tom Hill of the City of London police’s insurance fraud enforcement branch.

He went on to say that filing a fake insurance claim “may appear to be a victimless crime,” but it increases the cost of insurance for all customers.

Furthermore, the individual may end up doing jail time.

“While exaggerating or falsifying a claim for a high-priced wristwatch or television may appear to be a quick method to generate money, a conviction would have a long-term impact on your life,” Hill warned.

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