Artificial intelligence (AI) is being used to drive insurance fraud as the number of dodgy claims is on the rise, according to a survey of claims handlers.
One in five (19%) of the claims handlers surveyed across four sectors including medical insurance believed up to a quarter of all claims submitted might be created or altered using AI.
Censuswide quizzed 200 claims handlers; 50 each from four different insurance sectors: health and dental, home, pet and travel insurance on behalf of Sprout.AI.
It found that that 65% of insurance claims handlers had observed an increase in fraudulent claims since 2021 – 20% said this had been a significant increase while 45% said it was a slight increase.
Respondents also thought fraudsters were using AI for a significant proportion of claims received.
Overall, 83% of the 200 claims handlers suspect that at least 5% of all claims submitted were fraudulently created or altered using AI.
One in five (19%) said they thought between 11% and 25% of claims submitted had been formed or augmented by AI.
A further 64% suspected AI was involved in between 5% and 10% of all claims they saw.
Smaller claim amounts
It appears fraudsters may have begun focusing on smaller value claims, potentially avoiding more rigorous insurer checks, according to Sprout.AI.
Almost all (93%) of the claims handlers believed fraudsters were focusing on smaller value claims worth less than £2,000.
Claims valued between £501 and £1,000 were particularly likely to involve AI-generated or altered evidence, with 47% of handlers reporting seeing documents they suspect have been altered in this value range.
These documents can include photographs, maps, medical reports, or valuation certificates.
Common health insurance and dental insurance fraud schemes involve billing for non-existent procedures, inflating the costs of treatments, and submitting duplicate claims.
Sprout.AI CEO Roi Amir noted AI was increasingly being used by fraudsters to create fake documents, images, and data that can deceive insurers.
“Fraud costs the insurance industry billions in the UK alone every year, driving up costs and premiums for customers,” he said.
“This financial burden is particularly problematic during a time when many are already struggling with rising living costs.
“Insurers shouldn’t accept that fraud is unavoidable.”
