Insurance Risk Landscape: Car Crime Trends in 2021

The pandemic has changed the criminal landscape across the globe, with insurance fraudsters and car thieves all making the most of the disruption.
Tom Saminaden from BAE Systems Applied Intelligence, takes a look at how the threats are evolving in the new normal.

Over the last 12 months we’ve seen a whole host of new types of criminal activity, especially involving fraud, as a result of the pandemic. One big trend has emerged quite quickly, which is auto-related crime. In the UK alone, car thefts rose by 33% year-on-year in 2020, with DVLA figures revealing that 74,769 vehicles were stolen in the UK in 2020 compared to 56,288 in 2019 – despite the lockdowns. That is surprising given that many people were working from home, or on
furlough, which most people would assume means an extra level of security.

But there are lots of contributing factors to this increase in auto fraud, including shifting priorities during the pandemic, social distancing measures through lockdowns, and the reduction – or redirection – of budgets to fund Police patrols and crime-fighting programmes. Professional thieves also discovered that a target car was always parked in the same driveway, so they could make repeated attempts, depending on local residents’ activity, or vehicle
security.

According to a study by Rivervale Leasing there were an extra 18,000 cars stolen during the 2020 lockdown, which is a huge 33% percentage increase year-on-year. The big question is how many of those Ford Focus, BMW 3 Series or Range Rover models were stolen, or perhaps disposed of by financially hard-pressed owners/leaseholders? Many people have been impacted by the economic downturn and are trying to maintain their standard of living.

For example, if someone has a vehicle that was used for commuting and they’re now working from home, rather than selling it they may arrange to have it stolen, or report it stolen, to relieve the burden of car lease payments. Or if they can’t sell it because they owe more than the vehicle is worth they “sell it to the insurance company” via a claim for a total theft.

CAR CRIME IS OFTEN PART OF A PORTFOLIO

The issue of international motor theft movement is not just about the sale of stolen vehicles – the vehicles are used to carry bombs, weapons, and criminals, all contributing to the coffers of organised crime. Some cars are even being used as currency, as a payment for drugs, weapons and even people for the sex trade. When it comes to international vehicle crime and shipping vehicles overseas, the thieves themselves don’t usually get a great deal of money. It’s the criminal
organisations that are behind it that get the biggest benefit.

How big is this problem? It is significant. Interpol’s systems and relationships with other agencies across borders enabled the identification of some 120,000 stolen vehicles around the world in 2018. Criminals are using sophisticated technology, such as jammers, which prevent people electronically locking their cars. In Europe this is used mainly to steal property from inside cars, but in the US it’s often used to steal the cars themselves. Many stolen cars travel huge distances. For instance, a lot of cars stolen in the US end up in China.

Meanwhile in South Africa, hijacking of luxury vehicles by armed gangs, often involving murder of the drivers, is a problem that was largely unaffected by lockdown. There are just under 100,000 hijackings each year in South Africa. Business Insider in SA reported that hijackings are more common later in the working week, and the best day to avoid them is on a Sunday. The cars are stored until they “cool down” and then often sold to unsuspecting people, creating a major problem for insurers.

Another common activity in the country is known as “hula-hooping.” This involves someone who has problems with their vehicle – e.g. it needs repairs they can’t afford – paying criminals to steal the car. Once the criminals confirm to the owner that they have the car, the owner makes an insurance claim.

Given the scale of this global problem, it’s very good news that law enforcement bodies, insurers and other organisations are now working together, across industry sectors andgeographical borders, to tackle it – and it’s essential that that co-operation continues and grows.

This article was produced in association with BAE Systems