Insurance fraudsters ‘eyeing bigger payouts with average bogus claim at £14,300’

Insurers detected £1.34 billion worth of fraudulent claims in 2025, with an 85% annual surge in the number of bogus travel insurance claims, according to the Association of British Insurers (ABI).

The overall value of bogus insurance claims detected marked a 14% increase on £1.18 billion claims recorded the previous year.

Despite a rise in value, the number of detected fraudulent claims fell slightly to 93,900 cases, down by 2.7% compared with 2024.

The average value of a fraudulent claim reached £14,300 last year – the second-highest level on the ABI’s records and just below a peak of £14,600 recorded in 2022.

Motor insurance accounted for the bulk (55%) of detected fraud cases last year, with 51,900 fraudulent motor claims worth £625 million uncovered.

The average value per detected motor fraud claim was around £12,000.

The ABI has collected fraud data since 2004, and the average value per detected motor fraud claim in 2025 was the second highest figure it has recorded since 2015.

The number of detected property insurance claims fell by 6.2% annually to 17,700, but the average value of a fraudulent claim increased to a record high of £11,400.

Travel insurance fraud recorded a particularly sharp annual increase in volume, with an 85% jump in detected cases, reaching 4,500. The value of these cases increased at a slower rate than the volume, increasing by 16% to reach £8.6 million.

When looking at the types of fraud scammers attempted to commit, exaggerated loss remains the most common, with 26,900 cases identified, the ABI said.

Contrived incident and loss fraud saw a significant increase, rising by 30% to around 5,600 cases. These scams involve fraudsters deliberately creating or staging incidents, losses or circumstances in order to make a claim.

The ABI also said 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.

Mark Allen, head of fraud and financial crime at the ABI, said: “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.

“Insurance fraud pushes up costs for everyone, making it more important than ever that as an industry, we continue to work together to detect, prevent and deter fraud across all lines.

“Anyone considering committing insurance fraud should be under no illusion – it’s a serious crime with serious consequences, including a criminal conviction and imprisonment.”

Temporary detective chief inspector Simon Klust, head of the Insurance Fraud Enforcement Department (IFED) at the City of London Police, said: “Insurance fraud is not a victimless crime and those who commit it increase the cost of premiums for honest customers.

“These figures show that, on average, more than 250 fraudulent insurance claims are detected each day, and this is unfortunately likely to be just the tip of the iceberg.

“It is therefore important for collaboration across law enforcement and industry to further deepen to help with taking further steps to increase detection of insurance fraud, fight fraud and bring offenders to justice.”

Ursula Jallow, director at the Insurance Fraud Bureau (IFB), said: “Insurance fraud is devastating. It costs honest consumers when times are already tough.”

She added: “If anyone has information about insurance fraud, they can report it confidentially through our free CheatLine service.”