The insurer reported that it prevented nearly US$247,000 of fraud each day last year as cost of living challenges contributed to a surge in fraudulent insurance claims.
Zurich attributed the rise in fraudulent activity to the added pressure on household finances, which prompted more people to turn to fraud. The Insurance Fraud Bureau also saw a 17% increase in the number of fraudsters added to its register in the 12 months to July 2021. Overall, Zurich prevented 3,460 fraudulent claims and prevented the total value of fraud across all lines.
Among the false claims received, a woman had claimed for injuries she received from a fall caused by poorly stitched shoes when the injury had actually occurred four months earlier, while a man who had claimed he tripped on a raised water cover while catching chickens for a living was ordered to pay $21,000.
Zurich UK invested in new software called NetReveal, and launched real-time fraud checks to detect fraudsters who provide false names or addresses. Scott Clayton, the head of claims fraud at Zurich, warned fraudulent claimants of the real-world consequences of their actions, including criminal prosecution and prison sentences.
Zurich UK says rejected claims also increased in 2022
In 2021, Zurich UK identified over $10.409 million worth of fraudulent property claims, which is a substantial increase from the $5.842 million prevented in 2020. The number of fraudulent claims rejected also increased by 20%, from 394 to 473.
Speaking about the fraud situation in 2021, Zurich head of claims fraud Scott Clayton, said: “Sadly, many more people are facing hardships as a result of the cost-of-living crisis, which is contributing to an increase in fraudulent claims. Since the start of the year, we’ve seen a significant rise in bogus property claims, as households and businesses come under increased financial strain.”
Clayton also noted that Zurich is “better prepared than ever to detect [fraud]. He added: “New technology is helping us to fight fraud more effectively and making it harder for scammers to evade detection, whether they are individual opportunists or organised criminal gangs.”
