Fraud investigations save insurers a small fortune

INSURERS in Spain save about €43 for every euro they spend on investigating possible false claims, a new report has revealed.

Published by the ICEA insurance investigation group, the Fraud in Spanish Insurance 2014 report was drawn up with information from 30 different companies.

A total of 155,994 fraud attempts were discovered by the insurers last year. While the claims placed in these cases were for more than €586 million, investigations found the legitimate amount of compensation due to be €160 million and cost just €9.9 million to carry out.

The ICEA report revealed that seven out of 10 fraudulent claims are made on car insurance policies, most involving pre-existing conditions or damage that had not been declared.

The report noted a considerable increase in fraudulent claims for amounts of less than €500, which point to more non-professional scammers, although professional groups are still believed to make false claims, especially on car insurance.

While drawing up the report, ICEA organised the 11th Insurance Fraud Detection Competition, which awarded investigation work that detected and fought insurance frauds. The competition highlighted some surprising cases including a man who reported his luxury vehicle had been stolen in another part of Europe on the same date he had signed paper work to sell the car in Spain, and a woman who worked at a brokerage and had placed 39 fake claims on customers’ house insurance for personal benefit.