Scientists and insurers alike dubbed 2011 as the “yearof the cat,” referencing the record-setting succession ofnatural disasters and the widespread losses inflicted as a result. Well, a newreport from the National Insurance Crime Bureau (NICB) suggestsanother appropriate nickname: the “year of the cheat.”

That's because the Des Plaines, Ill.-based non-profitorganization logged a record number of questionable claims in2011—100,450 to be exact. This six-digit figure not only representsa 9.4-percent increase from the 91,797 reported the year prior (in2010) but also the highest number ever in NICB's 100-year history. It also indicates a 19-percent increase insuspicious claims activity during a 2-year time period, from 2009(in which NICB members referred 84,407 files) to 2011.

For classification purposes, questionable claims (QCs) are thoseclaims that NICB member insurance companies submit to NICB forcloser review and investigation based on one or more indicators ofpossible fraud. (Approximately 1,100 P&C insurance companiesand self-insured organizations comprise the NICB membershipbase.)

A single incoming QC may contain as many as seven “red flags,”or reasons for further investigation. Each file is categorizedaccording to type, such as property, casualty, commercial, workers'compensation, vehicle, and miscellaneous.

The NICB had reported a 7-percent spike in QCs in the third quarter of 2011. This mostrecent data suggests heavy suspicious activity within the casualtycategory. Specifically, “faked/exaggerated injury” and “excessivetreatment” posted the highest number of 2011 referrals, with 17,581and 8,485 respectively. In the workers' compensation arena,“claimant fraud” received the highest with 2,085 referrals, while“questionable vehicle theft” in the vehicle category logged themost referrals in 2011 with a total of 11,451.

Amid these troubling numbers, a positive trend did emerge:“auto glass fraud” saw the steepest decline across all categoriesin dropping to 817 referrals—a decrease of 1,365 from2010.

“We are encouraged by the trend in auto glass questionableclaims,” said Joe Wehrle, NICB president and chief executiveofficer. “Our efforts to make insurers, law enforcement, and theAmerican public more aware of the potential fraud in the auto glassrepair arena is hopefully having an impact. As we see trendsshowing an increase in questionable claims in a particular segmentof insurance coverage, we can focus our efforts on investigatingsome of those claims and putting a stop to the criminals that aretaking advantage of insurers and the public.”

The NICB is the nation's leading not-for-profit organizationexclusively dedicated to preventing, detecting, and defeatinginsurance fraud and vehicle theft through data analytics,investigations, training, legislative advocacy, and publicawareness.

The full report can be accessed here.