The insurance industry is set to spend £8.2 million as part of a police-private partnership to set up a specialist police unit to combat insurance fraud that costs the industry £2 billion, the Association of British Insurers (ABI) announced today.
Supported by the National Fraud Authority and funded by the insurance industry, the specialist unit will be operating under the City of London police’s economic crime directorate. The new unit will give more teeth to the Directorate focused solely on fighting fraud estimated at £2 billion.
The amount lost to fraudulent claims adds an extra £44 to each premium paid by the consumers every year, claimed the ABI.
The new unit, due to become operational on January 1, 2012, will be focusing on enforcement and prevention strategies designed to handle current issues.
The National Fraud Intelligence Bureau (NFIB) of the City of London Police and the industry sponsored Insurance Fraud Bureau (IFB) will come together to achieve the goal.
The new unit will work in partnership with the insurance industry on their continued effort to recover proceeds of fraudulent claims and prevent such claims in the future.
A quarterly meet, consisting of representatives from the National Fraud Authority, IFB, ABI and the City of London Police, will be arranged to set priorities for the unit with the input from an annual threat assessment and analysis of insurance fraud trends.
The proposed unit will “strengthen the UK’s counter fraud commitment”, said the ABI. It’s estimated that overall frauds cost the country £38 billion annually.
“This initiative is the culmination of months of hard work with the insurance industry, and represents another important landmark for private sector funding in policing, something that we should actively encourage within the current financial climate”, said Adrian Leppard, the commissioner of the City of London Police, commenting on the new initiative.
“The banking industry has been rewarded for its investment in combating payment card fraud, with savings of £370m in the past eight years. I now look forward to working with the ABI, IFB and the NFA to ensure the insurance industry benefits in the same way from funding its own specialist police unit”, he added.