Insurance fraud in UK hits £1.34 billion as travel scams surge 85%

Insurance fraud in the United Kingdom reached £1.34 billion in 2025, driven by an 85% surge in fake travel claims, according to new data from the Association of British Insurers (ABI). The total value of detected fraud rose 14% from £1.18 billion in 2024, even as the overall number of cases fell slightly.

The figures highlight a growing sophistication in fraud attempts, with criminals targeting larger payouts. The average fraudulent claim reached £14,300, the second-highest level on record, just below the £14,600 peak seen in 2022.

What types of insurance fraud are most common?

Motor insurance remains the largest category, accounting for 55% of all detected fraud. Insurers identified 51,900 bogus motor claims worth £625 million, with an average value of £12,000 per case. This marks the second-highest average motor fraud claim value since 2015.

Property insurance fraud fell 6.2% in volume to 17,700 cases, but the average value of a fraudulent claim hit a record high of £11,400. Travel insurance fraud saw the sharpest rise, with detected cases jumping 85% to 4,500, though the value increased more slowly at 16% to £8.6 million.

Exaggerated loss remains the most common fraud type, with 26,900 cases identified. However, contrived incident and loss fraud, where criminals deliberately stage incidents to make claims, rose 30% to around 5,600 cases.

How does application fraud factor into the picture?

The ABI also reported that insurers prevented fraudulent insurance applications worth £1.8 billion last year. Application fraud occurs when individuals deliberately misrepresent or withhold information to obtain 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.

Allen stressed that insurance fraud pushes up costs for everyone, adding:

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

What are the broader implications for consumers?

Temporary detective chief inspector Simon Klust, head of the Insurance Fraud Enforcement Department (IFED) at the City of London Police, noted that insurance fraud is not a victimless crime.

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.

He called for deeper collaboration between law enforcement and the industry to boost detection 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 encouraged anyone with information to report it confidentially through the IFB's free CheatLine service.

Why does this matter for Namibia and emerging markets?

The UK experience offers lessons for developing insurance markets, including Namibia, where digital adoption and new technologies are expanding. As fraudsters become more sophisticated, insurers and regulators must invest in detection systems and cross-sector collaboration to protect consumers and keep premiums affordable.

The data underscores the need for robust fraud prevention frameworks, especially as artificial intelligence tools become more accessible. For emerging economies, building strong insurance integrity from the start can prevent costly fraud epidemics later.

Frequently asked questions about insurance fraud

How much does insurance fraud cost the UK economy?

Detected insurance fraud reached £1.34 billion in 2025, up 14% from the previous year. This figure includes both claims fraud and prevented application fraud, which accounted for an additional £1.8 billion.

What is the most common type of insurance fraud?

Exaggerated loss remains the most common, with 26,900 cases identified in 2025. This involves claimants inflating the value of a legitimate loss.

How can consumers report insurance fraud?

In the UK, consumers can report suspected fraud confidentially through the Insurance Fraud Bureau's free CheatLine service. In Namibia, similar reports can be made to the Namibia Financial Institutions Supervisory Authority (NAMFISA) or local insurers.