The risk of AI in Insurance Fraud
Whilst AI offers limitless opportunities to innovate and streamline operations, It also provides an opportunity for fraud. As AI capabilities increase, so does the use in deception.
AI use in Fraudulent claims
Insurers are having to safeguard their business and their policyholders’ interests because on the other side of the fence, there are unscrupulous third-party representatives who, having also invested heavily in AI, are using it as a means to present inflated or even fraudulent claims. AI programs currently exist, allowing Claim Management Companies to invent claims that were far more serious than reality. They can manipulate data not only for motor claims, but also for property and liability, turning a claim with a minimal spend into a more serious event worthy of greater reserves and payments.
Insurers have heavily invested in research to gain knowledge and implement procedures and frameworks to identify AI-generated claims. When received, these claims will draw the attention of a qualified handler, who will then thoroughly investigate them. They are also utilising machine learning tools, such as “Incognito,” to identify potentially fraudulent claims more accurately and efficiently than traditional methods. This technology analyses large volumes of data to detect anomalies and patterns indicative of fraud.
AI use in Identity Theft
Brokers are seeing a sharp rise in the use of AI in identity theft for Motor Trade Insurance. Criminals are setting up companies with similar names to impersonate legitimate businesses. Once the companies are set up & have an online presence, they approach insurers & brokers to obtain insurance. This can lead to damage to the legitimate business’s credibility.
Use of AI in fake documentation
Motor Trade Insurance brokers & Insurers are aware of the use of AI to fraudulently doctor or create insurance documents. This can include photo ID, Motor Trade Insurance confirmed claims experience & lease agreements. These can be extremely difficult to detect when used to demonstrate the legitimacy of a Motor Trade business.
How to protect yourself?
There are many ways to protect yourself & your business from the potential threat. These can include:
- If you receive any documentation for your business that you didn’t request, report this immediately to the company that produced it.
- Be vigilant for any websites set up in a similar name. Especially if claiming to be at your current address.
- Make sure your websites are up to date with the latest cybersecurity software.
- Continue to keep any business documentation securely.
- Report Motor Trade claims promptly with full details, including pictures of any damage to your & third-party property.
If you would like to discuss an existing policy due for renewal or a completely brand new policy, please contact Jensten Motor Trade on 0203 131 6899, and one of our experienced team members will discuss the options with you.
