8.4 Million UK Motor Insurance Policies at Risk of Application Fraud: LexisNexis® Risk Solutions

  • New study from LexisNexis Risk Solutions finds one in three UK insured
    drivers believe some form of application adjustment to obtain a
    cheaper quote is acceptable
  • With over 24m active motor insurance policies in the UK, LexisNexis
    data suggests that 8.4 million policies could be at risk

study into motor insurance fraud
has found that more than one third
(35%) of insured motorists believe that it is acceptable to omit or
adjust data to reduce their motor insurance premiums on application,
according to LexisNexis® Risk Solutions.

With more than 24 million motor insurance policies in the UK1
the study from LexisNexis
Risk Solutions
suggests that the scale of application fraud could
therefore be far higher than the 212,000 annually detected cases2
with potentially up to 8.4 million policies at risk.

The study, which tracks UK insured drivers’ attitudes towards fraud,
found that the number of insured motorists who believe that some level
of potentially fraudulent behaviour is acceptable to get a cheaper
insurance quote has risen 9 percentage points since 2013 – from 26% to
35%. Additionally, the number of drivers that believe any omission or
adjustment of information whatsoever is acceptable when applying for
cover has also doubled from 6% to 13% – representing more than 3 million
currently insured drivers.

The research also found that a majority of drivers (55%) believe
insurers should continue to pay out on a claim even if it is
subsequently shown that the information provided by the applicant was
inaccurate. This figure is slightly higher than 2013 when 49% believed
insurers should cover the claim when asked the same question.

The study also explored attitudes towards common types of application
and claims fraud. 16% of drivers believe, for example, that it is
acceptable to adjust No
Claims Discount (NCD)
information to achieve a better rate, whilst
12% are comfortable using someone else’s address, or changing their
declared occupation or age to get a lower quote.

More than 3 million drivers comfortable with claims fraud

On the claims side, 14% of consumers say it is acceptable to report a
fake hit and run to explain self-inflicted damage, 9% to exaggerate the
severity of personal injuries and 8% believe that is acceptable to
change places with the driver at the scene of an accident or even
intentionally damage or abandon a vehicle to claim total loss.

Consumers also indicated potential to mislead insurers on previous
claims, with 10% viewing leaving out previous claims on application as
acceptable and 57% unlikely to notify their insurer of an accident if
they did not plan on filing a claim.

LexisNexis experts see this finding as significant due to the fact that
previous claims are one of the strongest predictors of future claims.
LexisNexis found, in its own separate analysis of three insurers, that
41% of consumers who had a prior claim under-reported those claims when
applying for a new policy. These consumers had claims costs that were
56% higher than the average consumer, and 34% higher than consumers with
the same actual claims history who had declared information accurately.

Bill McCarthy, Managing Director, UK and Ireland Insurance, LexisNexis
Risk Solutions, said “Many consumers may not even recognise that
adjusting or omitting information can constitute a type of fraud. It
illustrates a potential disconnect between consumers and the business of
insurance. This is in itself a major challenge, but also shapes how
insurers should respond to the risk of consumers providing incorrect

“It also demonstrates the increasing importance of verified data, which
can help manage risk effectively not only at underwriting, but also
reduce the burden for claims teams. By using some of the capabilities
available today such as pre-filling verified data into the application
process, insurers can simultaneously improve the quotation experience
for their customers, whilst subtly discouraging falsification
or omission,” McCarthy said.

Notes to editors


All figures, unless otherwise stated, are from a poll carried out on
behalf of LexisNexis Risk Solutions by Consumer Intelligence on a
nationally representative survey of 1,314 insured drivers and policy
decision makers aged 18 and over living in the UK. The online survey was
conducted in July 2015.


About LexisNexis Risk Solutions

LexisNexis Risk Solutions (http://www.lexisnexis.com/risk/)
is a leader in providing essential information that helps customers
across industries and government predict, assess and manage risk.
Combining cutting-edge technology, unique data and advanced analytics,
LexisNexis Risk Solutions provides products and services that address
evolving client needs in the risk sector while upholding the highest
standards of security and privacy. LexisNexis Risk Solutions is part of
RELX Group plc, a world-leading provider of information solutions for
professional customers across industries.

For more information on LexisNexis Risk Solutions, visit: http://www.lexisnexis.com/risk/uk/insurance/.

1 Source ABI 2014 – http://www.postonline.co.uk/post/analysis/2410482/trust-insurance-compulsory-motor-time-to-engage

2 Source: ABI 2015 https://www.abi.org.uk/News/News-releases/2015/08/Cutting-corners-to-get-cheaper-motor-insurance-backfiring-on-thousands-of-motorists-warns-the-ABI


Cohn & Wolfe for LexisNexis Risk Solutions
Paul Codd
(0) 207 331 5366
Risk Solutions
Regina Haas
Director, Media and Analyst