Artificial Intelligence (AI) is now being used heavily for the purpose of doctoring photographs and other evidence used to submit car insurance claims as part of increasingly sophisticated fraud. Allianz, which is the parent company of Liverpool Victoria - a well-known insurance company - has launched an investigation into the issue and found that claims within the insurance industry identified as fraudulent have risen by up to 300% in the last year. It's clear that scammers are becoming increasingly confident at cheating the system and arguably getting away with it.
A Rise in Accessibility
As AI continues to grow and become more common in society, the potential for abuse grows with it. In the case of car insurance fraud, the problem is rooted in generative AI - applications and tools which allow users to make wholly fictional images and photos which can then be edited to give the illusion of damage and injury for the sake of an insurance claim.
A prime example of this is one claim which has been given to LV, which was submitted by a van owner who attempted to present damage on the front bumper of the vehicle and used AI-generated imagery to showcase the 'damage'. The claim was then submitted. The final amount is unknown, but a £1000 invoice for 'repairs' was submitted along with it. An investigation from the anti-fraud team managed to confirm that this was AI after the real image surfaced on a social media profile. However, it was clearly easy enough to create the illusion of damage via one of these photo-editing tools.
Ongoing Concerns
Naturally, the rise of AI in the use of insurance fraud is not limited to one company - it is an epidemic which is sweeping the industry as a whole and has prompted concerns from all corners. Some people have gone on record to express their issues. For example, Matt Crabtree is head of Allianz's Financial Crime Intelligence & Investigation Strategy and had this to offer:
'There is some fantastic technology out there, which is making our lives so much better in many ways. However, the sad reality is that fraudsters are using this same technology for their own illegal purposes.
Insurance rival Zurich, represented in this case by Scott Clayton, had the following to offer:
"We have seen an increase in people locating total loss vehicles on salvage agents' websites and then implanting a [number plate] registration number onto that car. There are then claims made for that vehicle, and a claims handler assessing this claim would take that at face value, that it is that actual vehicle".
Understandably, this will warrant continued exploration of the issue and new investments. Many companies are putting resources into developing tools and strategies for identifying fraudulent claims. Many believe that this will be a major shift in the way that we look at fraud claims as a whole - with much more meticulous investigations being at the forefront of all processes.