The rising threat of ghost broking, a form of insurance fraud costing £15m
A major insurer has recorded that ghost broking (ghost brokers are now referred to as illegal insurance firms) accounted for £15m in policy fraud in 2025. Ghost broking is a form of insurance fraud in which individuals pose as legitimate insurance brokers and sell motor insurance policies to consumers, often advertising heavily through social media or messaging platforms. The “broker” typically offers a significantly cheaper premium, often targeted at young drivers (17-25 years old), and then either fabricates a policy entirely or purchases a genuine policy before manipulating key details, such as the named driver, occupation, address or vehicle use, to reduce the premium.
In many cases, the consumer is unaware that the policy information has been altered or that the cover is invalid. The issue often only comes to light following a road traffic accident, leaving the consumer motorist uninsured. Aside from the obvious indemnity and third-party exposure risk the issue poses it continues to present a growing and evolving risk for insurers as it sits at the intersection of organised fraud, regulatory risk and reputational exposure. While the immediate victims are often policyholders left without valid cover, insurers are increasingly required to manage the downstream consequences through claims disputes, litigation and regulatory scrutiny.
An example provided by Allianz UK in an insurance post article dated 12 March 2026 involved a ghost broker diverting payments of over £133,000 into his personal bank account. He was sentenced to more than five years in prison. His conviction followed an investigation led by the Insurance Fraud Enforcement Department with support from the insurer. He used his broker role to mislead customers, falsify documents, and misdirect payments intended for legitimate insurance policies, leaving people and businesses without valid cover.
Recent insurer analysis suggests that detections have increased by over 20% in the last two years, while law enforcement agencies report a 52% rise in identified ghost broking activity in recent years. The risk is particularly acute among younger motorists, with research suggesting that 31% of young drivers have purchased motor insurance through social media platforms. Against the backdrop of rising premiums and the increasing use of informal digital marketplaces, the conditions for ghost broking to proliferate remain firmly in place. As younger drivers more familiar with buying services via social media enter the market the risk only looks to increase in years to come.
Insurers are frequently left managing the financial and legal consequences. As the tactics used by ghost brokers continue to develop, it will be important for proactive marketing campaigns to hit key demographics amongst young drivers on social media platforms. Like most fraudulent activities forewarned is forearmed. The importance of early detection, clear policy wording and coordinated fraud strategies also becomes increasingly important. Insurers who take a proactive approach to identifying and responding to ghost broking will be better positioned to limit exposure and deter the continued growth of this form of fraud.
Tackling this type of fraud also involves key links and coordinated action between reporting bodies, industry organisations, and law enforcement. Victims are typically encouraged to report incidents to Action Fraud, which acts as the central hub for fraud reporting and intelligence gathering. Reports are analysed by the National Fraud Intelligence Bureau, helping to identify patterns and viable leads. Alongside this, the Insurance Fraud Bureau (IFB) works across the insurance market to share intelligence, monitor online platforms where ghost brokers commonly advertise, and coordinate disruption activity. Where evidence of organised or serious insurance fraud emerges, investigations may be pursued by the Insurance Fraud Enforcement Department (IFED) within the City of London Police, which is responsible for investigating and prosecuting insurance fraud offences. Together, these bodies form a reporting, intelligence, and enforcement framework aimed at identifying, disrupting, and prosecuting those involved in ghost broking.
Those instructed by insurers can support robust policy strategies, including advising on complex indemnity issues, policy wording, and pursuing recovery where appropriate. This must be balanced in situations where policyholders may be genuine victims who believed they had purchased legitimate cover. Beyond individual claims, identifying patterns across claims data and intelligence sharing will also be key. By linking suspicious claims, professional enablers, and intermediary activity, insurers are better placed to disrupt organised ghost broking networks. Combined with handler training and clear escalation pathways within the claims process, an integrated approach should enable insurers to detect ghost broking earlier and reduce overall risk.
For further information on this topic, contact our Insurance lawyers.
Insurance law