Insurance fraud hits £1.34bn as claims fall but payouts grow

A fraudulent motor, home or travel insurance claim submitted in 2025 was worth £14,300 on average, the second highest figure since 2015, beaten only by 2022’s £14,600.

Fraud is not shrinking, it is getting better paid.

Insurers detected £1.34 billion of fraudulent general insurance claims last year, according to the Association of British Insurers, up 14 per cent on the £1.18 billion detected in 2024.

The number of fraudulent claims fell at the same time, down 2.7 per cent to 93,900. Motor fraud made up 55 per cent of all cases, 51,900 claims worth £625 million between them, averaging close to £12,000 each, itself the second highest motor average on record.

Property fraud told a similar story. Cases fell 6.2 per cent to 17,700, yet the average property claim hit a record £11,400. Travel fraud moved the other way entirely, up 85 per cent to 4,500 cases, though its £8.6 million total stayed modest next to motor and property.

Set against that, insurers say they stopped £1.8 billion of fraudulent applications before a policy was even written, a quarter more cases than the year before. That is the one number in the release that is genuinely rising in volume as well as value.

Here is the detail worth sitting with.

Fewer fraudsters are being caught at claims stage, and each one caught is costing the industry more to have caught them. That is not a crime wave in retreat. It is a crime getting more selective, concentrating into bigger, harder cases while the cheap, careless scams fall away on their own, caught earlier at the point of sale instead.

A poacher who learns to take one stag instead of ten rabbits still empties the same larder. The gamekeeper’s headcount of catches looks better. The loss to the estate does not.

Insurers and the trade press will read a 2.7 per cent fall in claims-stage case numbers as progress, and in one narrow sense it is. Cruder fraud is being screened out earlier and more often, before it ever reaches a payout, which is presumably why application fraud detection is climbing at the same time claims fraud volume is falling.

But a falling claims-stage case count paired with a rising average claim is not the same achievement counted twice. It is one crime type retreating under pressure at the front door and a harder, costlier one still getting through further down the line, and the second does not show up in a headline built around volume alone.

Investigation teams, fraud analytics vendors and the regulators who oversee them still measure success chiefly by cases detected and cases referred for prosecution or declined. Motor fraud alone cost £625 million last year, more than half of everything detected at claims stage, and the file that takes longest to build and prove is worth the most to get right.

If the scorecard stays fixed on volume, the industry will keep congratulating itself for catching fewer claims-stage frauds. That is true even in a year when the ones that got through cost more, on average, than in all but one year since 2015.

The number that actually describes whether fraud is being beaten is not how many claims were caught. It is how much the ones that were not caught were allowed to cost, and on that measure 2025 was not a year of progress.