The biggest rise was in motor insurance where the number of dishonest claims rose by 34% to reach 59,900, with their value totalling £811m.
Overall, insurers detected a total of 118,500 bogus or exaggerated insurance claims in 2013, equivalent to 2,279 a week.
The average fraud detected across all types of insurance products was £10,813.
In one case 60 people, including seven members of the same family, were convicted of a ‘crash for cash’ staged accident fraud which involved over £514,000 being claimed from 25 vehicle crashes alone.
In another example a professional golfer who claimed £8,000 on his income protection policy for a knee injury that he said left him unable to work, was caught on camera giving golf lessons.
He was ordered to do 140 hours unpaid community work.
The ABI said calls from the public reporting suspected insurance frauds into the Insurance Fraud Bureau’s Cheatline rose by 32% in 2013 over the previous year.
Investigations by the Insurance Fraud Enforcement Department, a specialist police unit, have so far led to 470 arrests and 85 prosecutions of insurance fraudsters since it was established in 2011.
Aidan Kerr, the ABI’s assistant director, head of fraud, said: “The vast majority of customers are honest and rightly expect tough action against the fraudsters.
“Insurance fraud is not a victimless crime, which is why the industry invests £200m a year in fraud detection.
“This includes funding the Insurance Fraud Enforcement Department, and developing the Insurance Fraud Register, a central database of known insurance cheats.”
Kerr said it had never been harder to get away with committing insurance fraud or the punishments so severe.