In total, the value of fraudulent insurance claims uncovered by insurers rose 18% compared to the previous year and equates to more than double the cost the UK’s shoplifting bill.

The ABI found that in 2013, a total of 118,500 bogus or exaggerated insurance claims were made, equivalent to 2,279 a week.

Fraudulent motor insurance claims were the most expensive and common, with the number of dishonest claims at 59,900 claims up 34% on 2012 and their value at £811 million up 32%.

The ABI also said that insurance industry initiatives are turning the screw on the cheats, including the Insurance Fraud Bureau (IFB), which was created in 2006 to specifically tackle organised cross industry motor insurance scams. Currently the IFB is supporting police forces and insurers investigate 110 “crash for cash” scams, throughout the UK. These scams alone represent approximately £120m of financial exposure to insurers.

Meanwhile investigations by the Insurance Fraud Enforcement Department, a specialist police unit dedicated to tackling insurance fraud, which have so far led to 470 arrests and 85 prosecutions of insurance fraudsters since it was established in 2011.

And calls from the public reporting suspected insurance frauds into the Insurance Fraud Bureau’s Cheatline rose by 32% to 6060 in 2013 over the previous year.

Aidan Kerr, the ABI’s assistant director, head of fraud, said: ‘Insurance fraud is not a victimless crime, which is why the industry invests £200m a year in fraud detection, including funding the Insurance Fraud Enforcement Department, and developing the Insurance Fraud Register, a central database of known insurance cheats. The more that is done to crackdown on the dishonest, the quicker and more effectively insurers can deal with the claims from the honest majority.

‘The message is clear: never has it been harder to get away with committing insurance fraud; never have the penalties – ranging from a custodial sentence and a criminal record to difficulties in obtaining financial products in the future – been so severe.’