Opening its doors on January 3 the Insurance Fraud Enforcement Department (IFED) will combat a criminal threat estimated to be costing the UK economy £3 billion per year – adding on average £50 to each insurance policy.

IFED is an operationally independent unit – run by the City of London Police and supported by the Association of British Insurers (ABI) – dedicated to tackling insurance fraud across the UK.

Police detectives and financial investigators are already reviewing a number of cases following referrals from the insurance industry at the end of 2011.

Based at the City of London Police's New Street office in the capital, the 34-strong team is looking to make an early impact right across the spectrum. It will act on evidence of motor insurance, commercial and public liability fraud and illegal insurance advisers.

A major priority for IFED will be targeting the organised crime groups at the heart of much of today's insurance fraud.

Intelligence reveals these criminal networks are using an increasing number of professional enablers – doctors, solicitors, vets – to expand their operations and increase the threat against the insurance industry.

IFED will also be working to change the public perception of fraud, challenging the belief that small-time 'opportunistic fraud' is somehow acceptable.

City of London Police Cdr Ian Dyson, said: "This is an important day for both the City of London Police and the ABI, working together to deliver the Insurance Fraud Enforcement Department on time and budget.

"However, the real work begins today. IFED is here to turn the tide against all those who break the law, dismantling far-reaching criminal networks and changing a culture that says it is ok to submit bogus insurance claims. There is much to be done and there is not a moment to lose."

Nick Starling, the ABI's Director of General Insurance, said: "Insurers are determined to protect honest customers by reducing insurance fraud. This police unit is an important initiative as insurers intensify their crackdown on insurance fraudsters.

"The message could not be clearer: now more than ever anyone making a dishonest insurance claim is not only more likely to get caught, but risks getting a criminal record and certainly more expensive and harder to obtain insurance and other financial products in the future."