UK Pet Insurers Risking £50M+ Fraud Loss, Again?

The ABI recently reported that UK pet insurance companies paid out £1.23 billion in claims last year. With fraud rates in pet insurance likely matching the overall market’s 4.3%, it means over £52 million was lost to fraudulent claims. Will 2025 be a repeat?

How to deal with Fraud in Pet insurance?

Pet insurance fraud comes in different forms. Some are outright scams, like insuring a pet after it’s already sick and backdating coverage. Others are more subtle. Like inflated vet bills, exaggerated injuries, or even ghost pets that don’t exist.

But the biggest challenge? The lack of standardised data. Veterinary invoices can vary widely, making it harder to spot irregularities. Unlike human healthcare, where diagnostic codes are uniform, the pet insurance sector lacks a universal claims structure. This makes fraud detection more complex – so how do we fix it?

Tech-Driven Fraud Detection

Traditional fraud detection methods rely on manual reviews and that's slow, inefficient and prone to human bias. Automation, AI, and smart data analytics are the future.

Here’s what works for the most common frauds:

• Pattern Recognition: Machine learning can analyse historical claim data, detecting differences that could go unnoticed. Is a vet’s pricing consistently higher than the average? Is a pet’s medical history inconsistent across claims? Technology can quickly connect the dots and present the results transparently.
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• Real-Time Vet-Insurer Collaboration: What if insurers and vet clinics had a direct data exchange? These types of integrations could validate treatment costs instantly, preventing inflated bills before they even reach the claim invoice.
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• Behavioural Analytics: Fraudsters often follow patterns. Certain pet breeds, locations, or claim types might show higher fraud tendencies. Predictive analytics can proactively flag high-risk claims for further investigation without slowing down genuine ones.

Balancing Fraud Prevention with Customer Experience

Here’s the tricky part. Fight fraud too aggressively, and frustrating honest policyholders with endless documentation requests. The key is seamless fraud detection – where insurers can identify and prevent fraud without adding unnecessary friction to honest claims.

Automated pre-claim verification can validate pet ownership, medical history, and policy details without demanding manual intervention. Think of it like an automated package sorting system, it efficiently handles standard cases while flagging more complex ones for closer review.

Key to cut losses

As claims volumes are growing the way they do, so does the opportunity for fraud. Insurers who leverage data and automation will not only cut losses but also create a smoother, more transparent experience for pet owners and vet clinics alike.

Is your fraud detection strategy evolving, or still relying on old manual methods? Because fraud prevention isn’t just about stopping losses, it’s also about fostering a more secure and trusted pet insurance ecosystem.