Since the cost of living crisis hit, the number of insurance claims has gone up. While many of these are valid, 65 per cent of insurance claims handlers have noticed an increase in fraudulent cases according to research from claims automation company, Sprout.ai.
Two hundred insurance claims handlers were surveyed by Censuswide as part of the study and were asked how many cases they thought were fraudulent or manipulated by AI. Ninety-four per cent suspected that at least five per cent of claims were fraudulent. Meanwhile, 64 per cent suspect AI was used in five to 10 per cent of cases. Shockingly, 19 per cent suggested that one in four cases consisted of altered documents using AI.
Alongside the availability of AI tools for the everyday consumer, the cost of living crisis is thought to be driving up fraud rates. Sixty-five per cent of the claims handlers surveyed have seen an increase in fraudulent claims since the crisis started in 2021. Forty-five per cent reported a ‘slight’ uptick and 20 per cent saw more significant increase.
Roi Amir is the CEO of insurtech Sprout.ai,
Commenting on the research and its findings, Roi Amir, CEO of Sprout.ai said: “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.”
Cheating the system
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. Ninety-three per cent of the 200 UK claims handlers surveyed believe fraudsters are focused on smaller value claims worth less than £2000 with claims valued £501 to £1000 most likely to use AI-generated or altered images, maps, medical reports or valuation certificates for example.
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