A leading loss adjuster has said the insurance industry has to put more faith in their claims partners if they are to make a real impact on  the rising tide of fraud.

In response to the Association of British Insurers’ (ABI) Annual Fraud Report, which reported £1.16 billion worth of fraudulent general insurance claims were identified in 2024 – a 2% increase on the previous year,  Sarah Durkin, head of counter fraud at Woodgate & Clark, explained the results and the clear rise in fraudulent claims needed to be tackled before the claim was made.

“The Annual Fraud Report from the ABI underscores the growing scale and sophistication of insurance fraud,” she explained. “While loss adjusters have traditionally been seen as post-loss specialists their expertise has great potential in risk assessment at policy application and inception. It’s time for the sector to start leveraging that expertise in a far more holistic manner.

“At Woodgate & Clark, we believe loss adjusters can play a pivotal role in helping insurers stop fraud before a claim is ever made. We have a unique, granular view of how claims occur and as such, adjusters can work closely with insurers to uncover patterns in fraud, find vulnerabilities in policy wordings and identify issues around non-disclosure that not only serve to improve claims handling, but can also strengthen risk assessment processes at pricing and underwriting stage.

“By using their adjusting partners for site surveys, document forensics, and due diligence, insurers could reduce their exposure to loss and cut down the £1.16bn worth of fraudulent claims reported for 2024. Regular intelligence sharing by adjusters and trend analysis can also help insurers adapt to emerging threats and adjust pricing or terms accordingly.”

Durkin added: “The shift from fraud detection at claim to fraud prevention at underwriting stage is underway and while AI and automation are powerful tools, human expertise remains critical. Loss adjusters offer a powerful mix of real-world context and investigative acumen that can help insurers build more resilient, fraud-aware operations.

“The insurance sector is acutely aware that fraud prevention is about much more than reducing claims costs. By taking a proactive approach, we are protecting customers, helping to ensure fair outcomes, and building trust. Utilising loss adjusting expertise throughout the insurance journey, will ensure the opportunity is there to stop fraud at the front door.”

The ABI’s report stated when looking at the types of fraud scammers attempted to commit, exaggerated loss remains the most common. This is when someone deliberately attempts to increase the cost of a claim beyond its true value. Claims for this type of fraud rose by 10% and amounted to £466 million.

Alongside this, insurers prevented an estimated 684,800 fraudulent insurance applications, a 7.4% increase from 2023. Application fraud is when important information is purposefully misrepresented or hidden for financial gain when a policy is being incepted.

Mark Allen, head of fraud and financial crime at the ABI, said: “It’s reassuring to see the industry making continued progress in tackling fraud, but with insurers continuing to detect over £1 billion worth bogus claims, the fight must continue and there will be no let-up in insurers’ pursuit of fraudsters. Fraud doesn’t just harm its victims. It drives up premiums for everyone and causes grave emotional distress. That’s why cracking down on bogus claims and applications remains a top priority, but fraud can’t be tackled in isolation. It needs a collaborative approach alongside those in other sectors. A lot of fraud occurs on social media, and it’s vital that technology companies and social media platforms work with us and play their part in prevention and detection.

“Fraudsters are increasingly taking more sophisticated, agile approaches, aided by AI. This week serves a reminder that awareness is the first line of defence. For consumers, staying alert and being informed can make all the difference.”