Fake injuries, inflated car-repair bills and “fictitious” goods allegedly stolen in household thefts are among scams that insurance fraudsters perpetrate — and insurance fraud is rising again, largely because of the recession.

Admiral, the FTSE 100 insurer that runs Confused.com, became the latest group to warn that it had seen a marked increase in fraudulent claims, including ones by criminal gangs, in the first half of the year.

David Stevens, the chief operating officer, said that Admiral had referred “roughly a third” more suspicious claims to its specialist team during the period, compared with last year’s first half.

Mr Stevens said that Admiral, which specialises in UK car insurance, had discovered instances of fake whiplash claims after minor prangs, or clients lying about how many passengers they had in their vehicles at the time of an accident.

“There is some evidence that people are either creating fictitious claims or lying about the number of people in their cars,” he said. “The industry is feeling some rise in fraud, including organised gangs committing fraud.”

In the year’s first half, Admiral identified fraud and avoided paying out in claims worth 2 to 3 per cent of the £404.6 million in premiums that it had written, according to Mr Stevens. Because some fraud is not detected, fake claims are likely to represent about 4 to 5 per cent of all written premiums, he said.

Admiral is not alone. Aviva, Britain’s largest household insurer, said that it had found 29,000 fraudulent claims worth a total of £200 million in 2008, a rise of 30 per cent by volume and 20 per cent in value. Cases of insurance fraud have risen a tenth so far this year, Aviva said.

Andrew Buck, claims fraud manager for Aviva, said: “We have seen significant increases in both the motor and household arena. We cannot say how much of this is solely down to the economic climate. Clearly when times are tougher, crime increases.”

An estimated £1.9 billion in fraudulent general insurance claims go undetected each year, according to the Association of British Insurers (ABI). The claims, which include clients lying about their past to try to cut the cost of policies, add on average £44 a year to the cost of an individual policy, the ABI said. Although the ABI has found that insurers are raising detection rates — the industry rooted out £730 million of fraudulent claims in 2008, up 30 per cent on the previous year — it also said that evidence suggested that the recession was spurring activity.

RSA, the UK’s largest commercial insurer, found in a survey this year that 4.7 million Britons did not think it wrong to file a fraudulent claim, The figure is 1.1 million higher than RSA found in research last year.

Admiral’s first-half pre-tax profits rose by 5 per cent to £105.3 million, a record, after a 19 per cent increase in group revenues to £243.1 million. Profits from its UK car insurance operations rose 18 per cent to £101.2 million.

A record dividend of 27.7p a share means that Henry Engelhardt, the founder and chief executive of Admiral, will bank £11.2 million. He owns 15.22 per cent of the company.

Admiral yesterday handed its 3,000 staff shares worth £1,500 each, worth a total of £4.5 million.

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