Financial services firms could do more to clamp down on fraud, the industry's regulator has said.
Criminals involved in fraud are well-organised, says Sergeant
Carol Sergeant, head of regulatory processes and risk at the Financial
Services Authority, says the watchdog is investigating the frequency of insurance fraud.
"Many firms do not undertake a thorough analysis of the... financial crime risks to which they are exposed, and are not organised to tackle them effectively," she told an economic crime symposium at Cambridge University.
Firms are "too reactive" while smaller insurance firms appear to "underestimate the potential scale of fraud to which they are vulnerable", she said.
She also said there could be more co-operation and co-ordination between companies.
Most firms questioned expressed frustration at the lack of support from the police in pursuing fraud, which they attributed to limited resources, she added.
There needs to be a small number of national and international priorities in order to allocate funds to fighting economic crime, she said.
She warned that criminals involved in insurance or identity fraud are not opportunists but are well-organised.
The FSA is working informally with a group of bankers and insurers to encourage information-sharing.
The Association of British Insurers estimates that the industry looses £1bn on false household and motor insurance claims a year.
"Our members are treating the issue very seriously. We are encouraging insurers to centralise registers," said Malcolm Tarling of the association.
"Some companies are using voice stress analysers which are fed into any assessment."
The former director of the Serious Fraud Office, Rosalind Wright, has accused bosses of covering up the extent of fraud within and against their companies, reports the Evening Standard.
"They don't want to lose face with investors, to expose the fact they are victims of the crime," she told an annual crime conference.
"We don't have a culture that encourages people to come forward and blow the whistle. In the European Commission we have people treated like pariahs and even losing their jobs for reporting fraud."
The head of the City of London Police Fraud Squad, Ken Farrow, reportedly admitted last week that many cases will not be properly investigated unless more resources are committed to the fight.