ABI reveals insurance fraud hit £1.34bn as scammers target larger payouts

Insurance fraudsters in the UK shifted their tactics last year, targeting significantly larger payouts even as the total volume of detected scam cases dipped slightly, according to figures published by the Association of British Insurers (ABI).

According to data released by the ABI, the total value of bogus insurance claims detected in 2025 climbed to £1.34 billion. This represented a 14% jump compared to the £1.18 billion recorded during the previous year. Yet, this monetary increase occurred alongside a 2.7% reduction in the absolute number of detected fraudulent claims, which dropped to 93,900 cases.

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Mark Allen, head of fraud and financial crime at the ABI, noted that fraudsters are increasingly setting their sights on larger financial rewards.

"Although the rate of detected insurance fraud fell slightly last year, our data shows that fraudsters are targeting much bigger payouts. As emerging technologies such as AI become more widely available, fraudsters will continue to look for new ways to exploit them."

Mark Allen, head of fraud and financial crime at the ABI, via BBC and AOL

The average value of a fraudulent claim reached £14,300 last year. This figure stands as the second-highest level in the ABI’s records, sitting just shy of the peak of £14,600 recorded in 2022.

Motor insurance continued to generate the bulk of fraudulent activity, accounting for 55% of all uncovered scams. Insurers unearthed 51,900 fraudulent motor claims with a combined value of £625 million, translating to an average value of around £12,000 per claim. The ABI, which has collected fraud data since 2004, noted that the average value per detected motor fraud claim in 2025 was the second highest figure recorded since 2015.

Property insurance experienced a contrasting trend in volume and scale. The number of detected property insurance claims fell by 6.2% annually to 17,700, but the average value of a fraudulent claim within this category rose to a record high of £11,400.

Meanwhile, travel insurance fraud recorded a sharp annual surge in volume. Detected cases jumped by 85% to reach 4,500, while the financial value of these travel cases increased at a slower rate of 16%, totaling £8.6 million.

Exaggerated loss remained the most common type of insurance fraud, with 26,900 cases identified. This occurs when someone deliberately attempts to increase the cost of a claim beyond its true value. Contrived incident and loss fraud also saw a significant increase, rising 30% to around 5,600 cases. These incidents involve fraudsters deliberately creating or staging incidents, losses, or circumstances in order to make a claim.

Beyond post-loss claims, insurers prevented fraudulent insurance applications worth £1.8 billion last year. Application fraud occurs when information is deliberately misrepresented or withheld in order to obtain insurance cover or reduce premiums.

High-profile cases brought to light by the ABI and law enforcement underscored the audacity of modern scammers. One prominent case involved a man sentenced to 28 months in prison after filing false home insurance claims for supposedly stolen high-value Lego sets, alongside other items such as MacBooks, televisions, gaming consoles, and fishing equipment, during 2021 and 2022. Investigators from the City of London Police's Insurance Fraud Enforcement Department (IFED) discovered collectible Lego sets matching the stolen items displayed in the man's living room during a search, leading to his conviction and an order to repay the £14,000 he had claimed.

Other notable convictions highlighted by the ABI include a man jailed for 20 months for manipulating women he met on dating sites into participating in staged car crashes. A separate offender received a four-and-a-half-year prison sentence for submitting over £300,000 worth of fraudulent travel medical emergency claims.

Temporary Detective Chief Inspector Simon Klust, head of IFED at the City of London Police, emphasized the broader societal toll of these crimes.

"Insurance fraud is not a victimless crime and those who commit it increase the cost of premiums for honest customers."

Temporary Detective Chief Inspector Simon Klust, head of IFED at the City of London Police, via BBC and AOL

Klust added that the daily average of more than 250 detected fraudulent claims represents merely the "tip of the iceberg," calling for deeper collaboration across law enforcement and the industry to increase detection and bring offenders to justice.

Ursula Jallow, director at the Insurance Fraud Bureau (IFB), echoed these concerns, noting that insurance fraud is devastating and costs honest consumers when times are already tough. The IFB continues to operate confidential reporting channels through its free CheatLine service for individuals possessing information regarding insurance scams.

What to watch next

• Continued industry efforts by the ABI and the IFB to detect, prevent, and deter fraud across all insurance lines as emerging technologies such as AI become more widely available.
• Ongoing cross-industry and law enforcement collaborations aimed at increasing detection rates and bringing offenders to justice.