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Nearly all insurers (98%) say AI-powered editing tools are fueling an increase in digital insurance fraud, according to a new report from Verisk.
The Verisk State of Insurance Fraud study found that more than one-third of consumers (36%) are increasingly comfortable with digitally altering claim images and documents. And two-thirds of insurers (66%) say that digital media fraud is going undetected often or very often across the industry.
"AI editing tools are changing how people interact with digital content, and insurance is feeling that shift in real time," said Shane Riedman, president of anti‑fraud analytics at Verisk, in a statement. "Our concern is that many consumers don't see small edits as crossing a line, but when those changes make their way into claims, they can materially affect outcomes. As manipulated media becomes more common, many insurers face growing pressure to establish clearer boundaries, improve visibility and prevent fraud — while preserving a fair and efficient claims experience for policyholders."
Nearly all insurers (99%) say they have encountered manipulated or AI‑altered documentation, and 76% say that AI-altered claims submissions have become more sophisticated in the past year.
Among consumers, four in 10 (41%) say they know someone who has used AI editing tools to alter or create a photo, video or document for financial gain, including for insurance claims. That number is higher among Gen Z (64%) and Millennial (54%) respondents.
Half of Gen Z (55%) and Millennial (49%) respondents say they would consider making a digital edit to strengthen a claim, compared to 28% of Gen X and 12% of Baby Boomers who said the same.
A little over half of consumers (52%) say adjusting brightness or contrast to make damage easier to see is an acceptable edit, while 49% say it's also okay to crop out unrelated background elements. A smaller group of respondents (15%) say it would be okay to use edits to exaggerate damage, and 13% would be comfortable creating images of damage that never occurred.
Insurers are working to adapt their systems to better detect fraud. About two-thirds (65%) say they're using automated AI-based detection tools from third parties or vendors, and half (50%) say they're using internally developed AI tools.
But just 58% of insurers say they are confident in their ability to detect edits made to photos and videos, and fewer than half (43%) are confident in their ability to assess authenticity at scale. Only 32% say they are confident they could identify a deepfake.
"Insurers aren't standing still, but the threat is evolving faster than many systems were built to handle," Riedman said. "Detection tools that aren't fully integrated into claims workflows can create blind spots. As deepfakes and other AI‑driven manipulation become more common, the carriers will need more connected systems and shared intelligence to keep pace."
Both consumers (69%) and insurers (35%) believe fraudulent insurance claims could increase premiums for policyholders over time. Insurers say increasing digital fraud could also lead to longer claim cycle times and tighter documentation requirements for claimants.
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