Insurance fraud continues to grow across the industry, with an estimated £1bn undetected each year, adding around £50 to everyone’s premiums.
RSA takes fraud extremely seriously, and we’re committed to detecting and preventing insurance fraud so we can limit the impact on customers’ premiums.
It's important to send a strong message to the market - we're fully prepared to swiftly deal with genuine claims but we will remain fully vigilant on potentially fraudulent claims to protect our honest customers.
Peter Edgar, Head of Injury Claims
Background to the case
In 2009, our customer’s employee claimed they sustained a serious arm injury at work, rendering their arm functionless. They also claimed that they needed ongoing care for life and would not be able to work ever again, claiming £1.9m as a result. As part of normal protocol for large injury claims, RSA’s Counter Fraud Unit began their investigations.
Surveillance footage disproved the alleged seriousness of the claim when they captured the employee on film lifting a table and pushing a wheelbarrow without any visible pain. The claim was soon discontinued upon disclosure of the footage.
Why contesting exaggerated claims is important for the industry and genuine claimants
Simply declining a claim when it has been proven to be fraudulent is not the right outcome for our customers or the industry as a whole. It is a serious offence, and not a victimless crime. The cost of pursuing fraudulent claims such as this via the courts is an expensive and time-consuming undertaking, but vital if we are to deter other potential fraudsters and save our customers from carrying the increasing cost of this industry-wide problem.
RSA brought Contempt of Court proceedings against the employee for deliberately exaggerating the extent of their injuries for financial gain.
The case proceeded to the High Court in London in February 2014. At trial, the employee pleaded guilty after facing 25 separate counts of contempt and was immediately sentenced to prison for six months. It is important to stress that our customer supported us throughout and were satisfied it was the right thing to do, despite the obvious stress and publicity such a case could cause.
We are very pleased with the result in what was an outrageous example of exaggerated fraud. It's clear evidence of RSA's robust response to those who are determined to commit fraud against us.
John Beadle, UK Counter Fraud Manager
What it means for brokers
It is in brokers’ interests as well as insurers and our shared customers that the industry wide trend for insurance fraud is actively combated. Genuine claimants pay the costs of others’ fraudulent claims, either as a direct result of increased loss ratios on their policy or by wider impact on insurers’ costs.
Brokers have a key role in educating their customers to look out for some of the signs of fraud, and awareness of the industry’s singleminded approach to fighting it. Commercial customers in particular may be subject to many third party claims, and should be made aware that fraudulent claims may be not just declined, but for their benefit, pursued via the courts.