Sprout Research Identifies 65% Spike in Attempted Insurance Fraud

Following on from the news earlier about online fraud in Norway in Sweden, this release from Sprout also suggests that attempted fraud is on the rise in the UK too. Here’s the word;

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 1 in 4 claims are now using fake supporting documents that have been created or altered using 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. 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. 93% 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.

Alongside the availability of AI tools for the everyday consumer, the cost of living crisis is thought to be driving up fraud rates. 65% of the claims 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.

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.”