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Rising marine insurance fraud pushing up premiums

At a glance

  • £19million worth of insurance fraud is being committed each week in the UK
  • This has seen an industry-wide rise in claims
  • There are simple steps that boat-owning customers can take to reduce the chances of having to make a claim

While strong insurer-customer relationships have previously strengthened the marine insurance market against rises in premiums, an increase in fraud looks set to drive prices up.

Speaking to Motor Boats Monthly, Simon Tonks, Development Manager at Navigators & General (N&G), said that a rise in theft over the last five years, coupled with £19million worth of insurance fraud being committed each week in the UK according to the Association of British Insurers, has led to an inevitable rise in costs.

Marine insurance fraud

Source: ABI, 27/03/2013

“Over the years, the marine insurance industry has worked hard to build and establish strong relationships with its customers. It’s the strength of these associations that has, in part, helped maintain stable costs for its customers and ensure the market is less volatile than others, such as car insurance.”

“However, just like other markets, the marine insurance industry has not been immune to the effects of the recession. It is generally acknowledged that theft and fraud increase during recessionary times, as financial pressures bite.”

Precautionary measures

In fact, over the past two years, the market has seen a 5% rise in fraudulent claims. As a result, the insurance industry has reacting by putting additional time and resources into investigating claims more thoroughly. Zurich is no different.

With an increase in the theft of high-value portable items such as outboard engines, Zurich’s specialist teams recognise that many claims will be genuine. However, the economy has also seen a rise in claims for problems that would have previously been an easy fix.

“Inevitably in hard times, there is often less money to spend on maintenance and repairs,” Simon Tonks told Motor Boats Monthly. “This can contribute to an increasing number, as well as a higher cost of claims. In the past, a boat owner may have elected to pay for small amounts of damage or repair it themselves, rather than making a claim – that is less likely today.”

In the past, a boat owner may have elected to pay for small amounts of damage or repair it themselves, rather than making a claim – that is less likely today

Cutting costs across the board

For brokers working in the marine market, Simon Tonks stated that there are simple steps that their boat-owning customers could take, that would greatly reduce their chances of having to make a claim.

“Maintenance is a vital part of boat ownership, and it can also give you an in-depth understanding of your boat.”

He added that a good maintenance programme could help lessen the risk of an accident and may enhance the value of customers’ boats.

Providing commercial marine insurance for over 90 years, Navigators & General is one of the leading providers in the market. Zurich’s sales force are backed by N&G development underwriters, who use the existing UK network of Zurich Commercial surveyors to carry out risk assessment surveys and, where appropriate, provide free risk management advice.

To find out about Zurich’s range of N&G insurance products, please call your usual Zurich contact.

Image © Getty

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