Tuesday 16 July 2019

Threat of 'fraud tourism' driving up customer premiums, claims Aviva

 

Aviva has warned over rising fraud activity. Photo: Bloomberg
Aviva has warned over rising fraud activity. Photo: Bloomberg

Michael Cogley

Increased levels of fraudulent claims, compensation payouts and legal costs are having a "direct impact" on all consumer premiums at Aviva, the insurance giant has said.

Aviva also said that the level of awards handed down in Ireland had made the country very attractive for "fraud tourism".

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"These costs are unfortunately passed on to consumers through higher insurance premiums as a result," it said.

In a letter to a customer complaining of an increased premium, the company said that it was "trading and underwriting cautiously" in order to ensure it had enough funds to meet claims in the future.

"Due to the large volume of claims, including an increase in fraudulent claims, and an increase in compensation and legal costs, these factors have a direct impact on all customers' policies," Aviva said in the letter. It added that it had "invested significant resources" to stem the growth in the level of fraudulent claims.

"This includes a team of approximately 40 staff and a network of 50 retired Gardaí contracted to work with us, all of whom are dedicated to identifying and fighting fraud," the company said in a statement. "Where we suspect or have determined that a claim is fraudulent, we will fight that claim, up to and including in the courts. While the costs to do this are significant, we believe it is the right thing to do for our customers."

The statement follows a week where Axa, Allianz and FBD, the country's top insurers, were grilled before the Oireachtas finance committee.

Sinn Féin's Pearse Doherty alleged that the industry is using the issue of exaggerated claims as an excuse to push up premiums.

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