Insurance fraud is a "big worry" but the industry is becoming more aware, it has been claimed.

Graeme Trudgill, technical and corporate affairs executive of the British Insurance Brokers' Association (Biba), explained that his organisation is committed to finding fraudulent insurance claims.

He said that fraudsters put up the price of other people's premiums and cost the industry over £1 billion every year.

The Insurance Fraud Bureau was set up in July 2006 and Mr Trudgill claimed it is working hard to reduce fraud for the sake of honest people who should not be subject to increased home and car insurance costs.

In 2005, the industry exposed over £400 million worth of false claims, a 50 per cent increase on the previous year.

"Unfortunately, there will always be people out there who do try and cheat the system but I think that we are becoming more aware, more alert and we'll be more able to respond to it," he concluded.

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