A different kind of pressure…
Fuel prices aren’t just creeping up; they’re going up faster than Artemis II. At the same time, inflation isn’t easing in the way many expected, and interest rates continue to feed through into higher mortgage costs. For a lot of households, that combination is starting to land. Not as a single shock, but as sustained, ongoing pressure that isn’t going anywhere any time soon.
That’s the part that tends to influence behaviour. When financial headroom reduces, the way loss is viewed changes with it. A claim no longer sits in isolation; it sits alongside everything else that needs to be managed, absorbed, or, in some cases, offset. It doesn’t require a fundamental change in mindset, just a shift in how outcomes are approached.
The same patterns, just more of them
That shift isn’t driven by anything new or sophisticated. It’s not organised activity, and it’s not a change in the nature of fraud itself. It shows up in how claims are presented. A position that edges slightly further than it should. A version of events that becomes more certain than the underlying detail really supports. Across motor, household, property, and travel, the pattern is consistent. The claims themselves haven’t changed. What’s changed is how often they appear.
The data reflects that. The increase in fraud is being driven by more frequent, lower-value claims rather than large-scale organised activity. That points to a behavioural shift, not a structural one. More individuals operating closer to the line, more often, which is exactly what you would expect to see in a period where financial pressure is sustained rather than short-term.
PCP and the exposure building underneath
Layer onto that concern vehicle financing, particularly PCP. Many people now opt for what is, in effect, renting a new vehicle rather than purchasing it outright. That’s where PCP arrangements come in. They offer access to newer vehicles with lower upfront costs and manageable monthly payments, which on the surface makes them an attractive option.
The scale of that shift is significant. Around 80-90% of new cars in the UK are now purchased on finance, most commonly through PCP, and that model is increasingly being used across the used car market as well. Millions of people, therefore, do not own vehicles outright; they are maintaining ongoing finance agreements as part of their monthly outgoings.
The difficulty is not in the product itself, but in how it has been distributed at scale. Over recent years, vehicles have been moved quickly, often with affordability checks that appear to have become more of a gateway than a genuine control. The commercial priority has been clear: to move vehicles off forecourts. That works while financial conditions are stable. It becomes more challenging when they are not.
As costs rise and disposable income reduces, those agreements begin to bite. Monthly payments that once felt manageable become difficult. Negative equity becomes more apparent. Options to exit are limited. That pressure doesn’t sit in isolation either; it feeds directly into how a loss involving that vehicle is approached when something goes wrong.
Why approach matters
This is where the distinction becomes important. Pressure doesn’t suddenly create fraud, but it lowers the barrier to it. Not through a single decision, but through a series of smaller ones. A figure adjusted. A detail reinforced. A position taken that becomes harder to move away from once it has been set. Individually, those decisions don’t always appear significant. Collectively, they change the claim.
And these claims behave differently. They are not built like organised fraud, and they are not designed to withstand scrutiny over time. They are built around a position that has been taken, often under pressure, and then maintained. That is why approach matters.
This is also where alignment becomes important. An insurer’s counter fraud philosophy should be reflected in the way claims are investigated, and that extends to the partners they choose to work with. In this type of environment, where a proportion of cases involve what might reasonably be described as vulnerable policyholders who have made poor decisions under pressure, the approach needs to be controlled, proportionate and considered.
Handled correctly, these cases often resolve. Evidence is tested, positions are challenged, and individuals are given the opportunity to respond. In many instances, that leads to acknowledgement and a clear outcome, delivering genuine indemnity savings without unnecessary escalation.
Handled poorly, the opposite happens. Positions harden, engagement drops, and what could have been resolved becomes prolonged, more costly and less certain.
The distinction is not in whether fraud is challenged, but in how it is managed. Ensuring the right investigative approach, delivered by the right partners, is what allows insurers to deal with these cases effectively while maintaining fairness and proportionality.
The direction of travel here is relatively clear. The current economic conditions are not short-term, and the impact on claims behaviour is unlikely to be either. The indicators remain the same, the behaviours remain the same, but the volume increases as more individuals find themselves operating closer to that line.
And the real question is how well that is recognised and managed, when it does.
David Booker M.A
