VFM Services, the desktop counter fraud services provider warns insurers of an increase in fraudulent travel claims due to the hot summer this year.
Travel agents have reported a decline in foreign holiday sales over the summer, as holidaymakers chose to stay in the UK to enjoy the hottest weather in a decade, and VFM Services has already experienced a rise in the number of cancellation claims it is currently identifying as fraudulent as holidaymakers cancel their holidays to stay and enjoy the UK heat wave.
With the average claim for cancellation on a travel insurance policy reaching £1,200 – the heat wave could cost the travel insurance industry hundreds of thousands of pounds.
In addition, VFM predicts an increase in the number of fraudulent baggage claims as people return from their holidays, both from the UK and abroad, and warns insurers to be extra vigilant. Each baggage claim averages £360, again, potentially pushing up the cost to insurers.
Sally Griffiths, Director VFM Services, warns: “We believe that there will be people trying to fraudulently claim on their travel insurance policy because they’ve cancelled their holiday to enjoy the summer here in the UK, and don’t want to pay cancellation costs. Our investigators are already seeing cancellation claims, and as people return from their holidays fraudulent travel claims will continue to rise as holidaymakers also submit their baggage claims. Insurers should consider outsourcing at times where claims volumes surge, so they aren’t forced to merely settle claims without further investigation, further increasing the potential for fraud.
“Travel insurance tends to be a price led low value product that often suffers from a lack of customer loyalty, and is therefore more open to fraud compared to other sectors. If the industry is going to stamp out fraud then it needs a stringent and consistent zero tolerance approach to fraud across all lines.”