UK Chancellor George Osborne has announced a crackdown on whiplash insurance fraud.

The country is known as the whiplash capital of Europe, with almost 500,000 claims last year costing insurers £2 billion ($3.6 billion) in payouts and driving an average premium rise of £90 ($162) for motorists.

From next year whiplash cheats, “whose fraudulent compensation claims have driven up average motor insurance premiums”, will be scrutinised by independent medical panels.

“This will ensure that only evidence from accredited professionals can be considered and will mean people can no longer profit from exaggerated or fraudulent compensation claims,” Mr Osborne said.

Figures released by the UK Government show whiplash claims fell more than 12% last financial year.

There were 477,257 whiplash injuries recorded in 2012/13 compared with 543,849 in 2011/12.

Total motor injury claims also dropped to 819,304 from 829,661.