Kathmandu. Generative AI is transforming the insurance fraud landscape. Deepfake technology is enabling criminals to create credible counterfeit evidence and mimic people at scale. Deepfakes associated with what was once high-profile celebrity videos are now a growing threat to property casualties, life and health insurance companies.
Insurance companies are already feeling the impact. British insurer Admiral has released a report of discovering fraudulent claims worth £86.8 million in 2025. That’s up 71 per cent from £50.9 million in 2024. The company attributed some of the growth to AI-generated images, altered documents and exaggerated claims.
Fraudsters are using readily available AI tools to create non-existent or exaggerated property damage, fake vehicle damage, altered license plates, fake maintenance documents, and images of fake high-value properties.
In the UK, Allianz reported a 300% increase in the number of photo, video and document tampering between 2021-22 and 2022-23. This report has exposed the rapid growth of digital proof fraud.
This threat is not limited to the photos. Social engineering attacks are also using voice cloning and deepfake video calls. Criminals impersonate insured, beneficiary, executive, or claims officials to request payments, change insurance policy details, or access sensitive information.
Arup, a British engineering group, was involved in one case of widespread fraud. It lost nearly $25 million in a video conferencing scam in Hong Kong after fraudsters used digitally cloned voices and images. However, the incident took place outside the insurance sector. This illustrates how deepfake technology can undermine trust-based authentication processes.
Scammers are increasingly combining deepfakes with artificial identities, fake documents, and stolen personal data. Which makes it even harder to detect.
Insurance claims may include supporting photographs, identification documents, voice corroborations and written evidence. However, most of them have been artificially created or altered.
Insurance companies are responding by increasing digital fraud controls. Many are investing in AI-based detection tools, digital media forensics, biometric testing, metadata analysis, and real-time fraud scoring at the first sign of loss. These systems can analyze light, facial expressions, photo differences, file history, and other signs of AI manipulation.
Industry support is also increasing. Insurance crime agencies, data analysis firms, and carriers are sharing research into AI-enabled fraud. A recent Verisk study uncovered by the National Insurance Crime Bureau found that 36 percent of consumers would consider digitally altering a claim image or document.
The rise of deepfake fraud has a significant impact. Losses from fraud can increase the cost of insurance companies. This leads to higher premiums for honest insured. In addition, genuine claims can be scrutinized more closely and the review time can be longer as insurance companies separate the actual evidence from the manipulated evidence.
Regulators are also becoming more focused. The proposed DeepFake Scams Prevention Act in the US would create a task force to study AI-related fraud risks in financial services and recommend consumer protection measures. In Europe, the EU AI Act includes transparency obligations for certain AI-generated or manipulated deepfake content, and the regulations are expected to be mandatory by 2026.
Insurance industry experts predict that the risk will increase as generative AI tools become more realistic, affordable, and readily available. Insurance companies that invest in detection technology, employee training, robust identity checks and updated claims processes will be better positioned to manage risk.
The advice to consumers is clear that suspicious calls, e-mails or payment requests through official channels should be verified and sensitive information should not be shared unless the source is confirmed. As fraud transitions from paper-based plans to technology-based operations, the insurance industry’s ability to adapt will be critical to mitigating the impact of deepfakes on insurance companies, customers, and the broader market. –Agency
