Funded by the insurance industry and supported by the National Fraud Authority, the unit will be operated by the City of London Police’s Economic Crime Directorate.
It will provide additional operational capability to the Directorate, focusing solely on tackling insurance fraud: a crime currently valued at GB pound 2 billion per year and which adds an extra GB pound 44 per annum to each premium paid by consumers.
The unit, which is scheduled to ‘go live’ on 1 January 2012, will consist of 35 specialist fraud detectives and police support staff, and will provide a dedicated response to threats posed to the insurance industry by both organised gangs and opportunist fraudsters.
The key focus of the unit will be enforcement and prevention strategies designed to tackle current issues. This will be achieved working in collaboration with the City of London Police’s National Fraud Intelligence Bureau (NFIB) and the industry-funded Insurance Fraud Bureau (IFB).
While embedded within the force’s Economic Crime Directorate, the unit will be able to capitalise on the City of London Police’s wider policing resources as well as its status as the national lead force for fraud (in turn enabling it to co-ordinate support from UK law enforcement and assist individual forces with their own insurance fraud investigations).
In addition, the unit will work in close partnership with the insurance industry on its continued campaign to prevent insurance fraud and recover the proceeds of crime.
Funding from members of the ABI
For the next three years, the unit will be funded years by members of the Association of British Insurers (ABI) and be subject to an evaluation after its initial two years of operation.
A strategic Board containing representatives from the City of London Police, the ABI, the National Fraud Authority and the Insurance Fraud Bureau will meet quarterly to set priorities for the unit informed by an annual threat assessment and analysis of insurance fraud trends.
The unit builds on the operating model established for the Dedicated Cheque and Plastic Card Unit (DCPCU) where the priorities are set by industry, performance is transparent and reviewed regularly but the operational independence of the police is preserved.
The DCPCU’s unique bank-sponsored police squad contains officers seconded from the City of London Police and the Metropolitan Police Service. In the nine years since its formation, it has successfully targeted organised crime gangs and saved an estimated GB pound 370 million.
This latest announcement will strengthen the UK’s counter fraud commitment, and comes at a time when overall fraud is estimated to cost the UK GB pound 38 billion.
The City of London Police sees this as a positive step forward in realising closer relationships between policing and the private sector, paving the way for other specialist units and, potentially, national economic crime teams to be created through similar funding arrangements in other sectors.
Confirmation of the unit comes just days after the ABI revealed it was setting up an Insurance Fraud Register to maintain details of known insurance fraudsters and identify anyone who fails to declare a previous fraudulent claim.
Comment from the Commissioner
The Commissioner of the City of London Police, Adrian Leppard, said: “A dedicated police unit funded by the insurance industry and operated by fraud detectives from the City of London Police is a major step forward in the fight against a crime that hits the pockets of everyone paying insurance premiums.”
He continued: “This initiative is the culmination of months of hard work with the insurance industry, and represents another important landmark for private sector funding in policing: something that we should actively encourage within the current financial climate.”
In conclusion, Leppard stated: “The banking industry has been rewarded for its investment in combating payment card fraud, with savings of GB pound 370 million in the past eight years. I now look forward to working with the ABI, the IFB and the NFA to ensure the insurance industry benefits in the same way from funding its own specialist police unit.”
Home Office minister for crime and security, James Brokenshire, said: “Fraud costs the UK around GB pound 38 billion a year, can have devastating consequences and is often used to fund terrorism, drugs and human trafficking.”
“The Government is determined to give greater focus to tackling both serious and economic crime, which is why the powerful new National Crime Agency will ensure we have an improved capability to tackle this issue.”
Brokenshire continued: “This will be a great example of how collaborative working can help to combat fraudsters, and I want to congratulate and thank the insurance industry and the City of London Police for all their hard work and dedication.”
David Neave, chairman of the Insurance Fraud Bureau, explained: “This strategic step is further evidence of the investment and commitment by the insurance industry in combating fraud. The IFB welcomes the opportunity to support this important industry initiative by working collaboratively with insurers, the City of London Police, the ABI and the NFA to bring fraudsters to justice and protect the interests of genuine consumers.”
Dr Bernard Herdan, CEO of the National Fraud Authority, also commented on this latest development in the fight against fraud.
“I welcome these very significant developments and congratulate the insurance industry for funding them,” explained Herdan. “This clearly shows the insurance industry responding positively and creatively in tackling fraud, and setting an example from which I hope others can learn.”
Herdan concluded: “This is a great achievement by all the parties involved – the NFA, the City of London Police, the ABI, the IFB and the individual insurance companies who have participated. I’m fully confident the unit will make a significant impact on insurance fraud, in turn benefiting the industry and its customers.”
