GDV: Costs of fraudulent claims is increasing, in line with the increasing benefits in P&C insurance

9 May 2024 — Daniela GHETU

German insurers expect significantly more losses from insurance fraud, reaching over EUR 6 billion. While the share of suspected cases in all claims reports remains unchanged, at about 10%, claims inflation is pushing the absolute figures up.

"With the overall increase in benefits in property and casualty insurance, the costs of fraud are also going up," explained Jörg Asmussen, Managing Director of GDV. By way of comparison, insurers have so far estimated the loss at around four to five billion euros per year, an article published on the German Association of Insurers (GDV) said.

According to GDV, half of the dubious losses are attributable to motor insurance, the rest to the other lines of property and casualty insurance. The proportion of conspicuous losses of 10% is based on estimates by fraud prevention experts from GDV member companies.

In German insurers’ view, claims may be considered dubious when not consistent, the description provided by those affected not matching the hard evidence, photos or even the account of the other part involved in the event. While most “customers are honest and not every dubious claim is a case of insurance fraud”, GDV representatives emphasized, there is still a rather widespread acceptance of the idea that insurance fraud is a trivial offense and, in many cases, even morally acceptable. Many customers still need to understand that insurance fraud is punishable by law. “If fraud is proven, the insurer does not have to pay for the damage. In addition, he can terminate the insurance contract, claim back expert costs and report the case. If convicted, fraudsters face hefty fines or even jail.”