Customers pick up the bill as insurance companies ‘fail to chase down’ fraudsters as it’s too expensive, reform group claims

The industry has repeatedly claimed that around 20pc of the personal injury claims they get could be fraudulent or exaggerated.

But figures reported by the Central Statistics Office show that the number of reported insurance fraud cases is less than 1pc.

CSO figures show that there were 153 recorded incidents of insurance claim fraud in 2019.

The total fell to 120 in 2020, and to just 84 last year.

This means that the number of reported fraudulent claims is less than 1pc of the total number of claims processed through the system, the Alliance for Insurance Reform has calculated.

“Even from the very low base in 2019, the number of reported cases has tumbled by 45pc in two years.”

Peter Boland of the Alliance accused the industry of using fraudulent claims as a way to justify high premiums.

He said fraud was a major issue but insurers would prefer to settle dodgy cases and pass the cost on to policyholders than pursuing questionable claims.

“We are shocked by these figures. The direct experience of our members is that there is a significant level of insurance fraud, including exaggerated claims, which is not reflected in them.

“Insurers hid behind the fraud issue for years as a way of justifying excessive premiums.”

Mr Boland said that move by gardaí to set up a centralised unit to tackle bogus claims has not been matched by insurers putting more effort into tackling fraud.

“Many of our members tell of situations where insurers knew claims were fraudulent and settled anyway, in order to avoid the cost of standing up to fraudsters.

“They would prefer to settle and pass the cost on to their customers, rather than spend money rooting out fraud and reduce their profits,” Mr Boland said.

Insurance Ireland, the representative body for the industry, said the majority of claims are genuine and the vast majority of policyholders are honest.

“That said, Insurance Ireland does see fraud and exaggeration of loss and injury as a contributory factor in the cost of insurance in this country.”

It said that a review it conducted in 2015 estimated that insurance fraud costs €200m annually, of which motor insurance fraud costs an estimated €100m.

This was in line with UK and EU levels, it said.

In claims terms in the review, insurance fraud represents approximately 10pc of claims costs, Insurance Ireland said.

And it denied it was deliberately keeping premium costs high.

It said CSO data shows that motor premiums have reduced consistently over recent years.

Premiums are down 26pc since the start of 2019, it said.

Since the implementation of the new judicial guidelines on injury awards in April 2021 the reduction was 15pc.

“These reductions have to be assessed against the background that courts did not confirm the guidelines during that period.

Insurance Ireland said there are still rulings in personal injuries cases that go to court that ignore the new guidelines completely.