Menu Search through site content What are you looking for?

Whiplash reforms will drive fraud into other Casualty lines

  • Market Insight 2 January 2020 2 January 2020
  • UK & Europe

  • Insurance & Reinsurance

With motor-related soft tissues injuries no longer a cash cow for fraudulent claims, criminals (and opportunistic amateurs) will turn their attention to areas such as public liability

Whiplash reforms will drive fraud into other Casualty lines

When it comes to fraudulent motor insurance claims, insurers established sophisticated processes for rooting out fraudulent activity some years ago. As fraudsters have changed their tactics, so insurers have learned their lessons and adapted accordingly. The result has been extremely effective anti-fraud processes and technologies that can make the claims handling in other casualty insurance classes such as employers and public liability seem rudimentary.

Now, in light of upcoming government reforms to whiplash claims, it is imperative that hard-learned lessons from the motor arena are translated (as far as is possible) with urgency to other casualty insurance lines.  We have seen already examples of organised fraudsters moving into other areas to test systems, processes, checks and balances of other insurance lines.  Organised fraud can take the form of complex claims inflation and damages shift.

While there have been numerous discussions in the industry regarding claims inflation and damages shift for several years now, little hard data has been gathered about how these are manifesting in claims lines outside motor.  In order to fight these issues, we expect that insurers and defendant representatives will move away from the traditional anecdotal evidence method of addressing these concerns toward a more data-driven approach.

Should this lead to the uncovering of an increased volume of fraudulently inflated claims, insurers will display an increased appetite to seek redress through the criminal courts. Recent case decisions have demonstrated that statements made in an effort to advance a fraudulent claim, even when made pre-action, will be taken into account by the courts.

Read the rest of our insurance predictions here.


Stay up to date with Clyde & Co

Sign up to receive email updates straight to your inbox!