UK insurance fraud spikes as customers use AI to falsify claims
Claims handlers believe advancements in technology and economic pressures are driving fraudulent activity, with up to one in four claims generated by AI or altered data
Research from claims automation company Sprout.ai shows 65% of insurance claims handlers have noticed an increase in fraudulent claims since the cost-of-living crisis hit. Additionally, 19% of those surveyed suspect that up to one in four claims are now using fake supporting documents that have been created or altered using artificial intelligence (AI) and digital tools.
In total, 94% of the 200 claims handlers surveyed by Censuswide as part of the study suspect that at least 5% of claims are being fraudulently created or altered using AI. While 19% believe the latest digital tools are being used in 11–25% of all cases and 64% suspect AI is playing a role in 5–10% of all cases.
Due to the cost of manually reviewing every claim, some insurers auto-approve claims below a certain threshold and the survey suggests fraudsters have cottoned-on to that fact. A total of 93% of the 200 UK claims handlers surveyed believe fraudsters are focused on smaller value claims worth less than £2,000 with claims valued £501 to £1,000 most likely to use AI-generated or altered images, maps, medical reports or valuation certificates for example.
Alongside the availability of AI tools for the everyday consumer, the cost-of-living crisis is thought to be driving up fraud rates. Research shows that 65% of the claim’s handlers surveyed have seen an increase in fraudulent claims since the crisis started in 2021 with 45% reporting a ‘slight’ uptick and 20% seeing more significant increase.
Roi Amir, CEO of Sprout.ai, commented: “Insurance fraud costs the industry billions, and this latest data shows it is on an upwards trajectory. Fraud has profound economic and societal consequences, driving up costs and premiums for insurance customers. The use of readily available AI tools to create and edit supporting documents for insurance claims is prolific, an issue that insurers need to regain control of by fighting AI with AI. Powerful data processing tools, enabled by generative AI, can detect fraud by comparing the current claim against a vast database of imagery, documentation and existing claims data, flagging irregularities in real time.”
Sprout.ai recently released a new intelligent claims evidence processing product to accelerate the accuracy and speed of claims.