Fighting fraudulent claims continues to be a huge cost to insurers, motorists, and society
Insurance fraud is not a victimless crime
The withdrawal of suspected fraudulent personal injury claims, either before or on the steps of the court, has appeared as an emerging trend in recent years. Analysis from Aviva Insurance Ireland DAC (Aviva) claims statistics show that there are an increasing number of claimants who withdraw their claims having hired a solicitor and started legal proceedings once it is evident that the insurer will not settle their claims and is prepared to challenge them in the courts. This trend has increased as the company enforces its policy to defend these cases up to and including going into court. The insurer continues to operate a zero-tolerance approach where personal injury claims are suspected to be fraudulent, including exaggerated claims, despite the additional costs.
Aviva has today reported that, since January 2021, as many as 91 individuals, who instructed solicitors to pursue personal injury claims against its insured customers, which the company suspected were fraudulent, subsequently withdrew their claims prior to the court hearing, with many of the withdrawals happening on the steps of the court. In many instances, the plaintiffs’ legal representatives made attempts to settle the cases before the court hearing by offering to accept reduced amounts of compensation, but subsequently advised their clients to withdraw the claim when they realised that the insurer planned to fully defend the cases through the court system.
Commenting Rob Smyth, Senior Fraud Manager, Aviva said: “The emergence of this trend is further evidence that there continues to be a cohort of individuals who are willing to fake accidents and personal injuries in the hope of receiving a generous pay-out from the courts. Unfortunately, these claims continue to be a major cost to the insurance industry, to our customers, and to society at large. The costs of investigating and defending suspected fraudulent claims, the majority of which take a minimum of between three to five years to come before the courts are significant. These 91 cases represent only a small percentage of the total number of suspected fraudulent or exaggerated claims that we receive each year. Over the same period, we had a further 70 suspected fraudulent claims that were dismissed by the courts. Defending these cases cost the company in the region of €2 million.
The onus to identify and defend against fraudulent claims should not rest solely with insurers and judges. These cases could not find their way through the legal system without being enabled by members of the legal and medical profession. The legal and medical professionals who assess and advise on these cases must also bear a responsibility. Whilst the legal profession may argue the old mantra that ‘everybody deserves their day in court,’ it is hardly credible that none of the legal advisors of the 91 claimants recognised that the claim being brought forward was not genuine until they were informed that an out of court settlement would not be agreed. The vast majority of legal and medical practitioners that we engage with have high ethical and professional standards. Unfortunately, it is the actions of a minority that raise questions which the legal community need to address to ensure that everyone plays their part in protecting society and especially the innocent victims from the actions of criminals.Rob Smyth, Senior Fraud Manager, Aviva
“These fraudulent claims, in addition to having a financial impact on the cost of every motor insurance premium in the country, are most certainly not victimless crimes. Behind each one of these cases is an innocent customer who has been subjected to unnecessary stress and trauma over a protracted period as they await the outcome of the case. We put a lot of effort into supporting customers as many find the whole legal process and the prospect of having to give evidence in court to be very intimidating. We are very grateful to them for supporting us in defending claims made by fraudsters. These innocent policyholders were simply in the wrong place at the wrong time when the opportunist struck and the next time, it could be any one of us who becomes the victim,” said Rob Smyth.
The issue of fraudulent insurance claims has been highlighted for some years as a significant contributor to the cost of insurance premiums. The investment made by companies like Aviva in investigating and fighting these claims is having some positive impact as is seen by the growing trend of cases being withdrawn at the last minute. However, they also raise the question as to how these claims have progressed so far through the legal system without being recognised by the legal professionals involved in putting them forward.
In addition to the increased premia for motorists and business owners and the toll that these fraudsters are having on the innocent person whose insurance they are claiming on, there are also other societal impacts. These include medical appointments to support an alleged injury adding to the overcrowding in hospital A&Es as genuinely sick or injured people may have missed appointments to facilitate a fraudster. An interesting 2019 study by NUI Galway found that, while medical appointments for personal injury claims continue for many years, they cease when a settlement payment is made.
“Insurance fraud remains a burden on our customers and on society and Aviva will continue to robustly defend claims that we suspect are fraudulent. We have an experienced team of in-house investigators and have invested in fraud analytics, along with the latest automated fraud detection technology,” concluded Rob Smyth.