The Association of British Insurers is to pay £8.7m to fund a specialist police unit to fight insurance fraud.
The ABI will pay £2.9m a year to fully fund the unit for the next three years. It will have 35 specialist fraud detectives and be operated by the City of London’s economic crime directorate. The police say that insurance fraud costs industry £2bn a year, adding £44 to each premium paid by consumers.
City of London police commissioner Adrian Leppard says: “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, and the fraud authorities to ensure the insurance industry benefits in the same way.”
The unit will begin operating in January 2012 and target fraud right across the sector. After three years the arrangement will be reviewed.
Last week the ABI announced a national insurance fraud register which enables insurers to share information on known those who are known to cheat the system.