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Recent data on insurance fraud is hard to come by. Estimates suggest that 10% of claims are either fabricated or inflated. However, some industry stakeholders are raising concerns that artificial intelligence (AI) could drive a new wave of fraudulent claims.
“The potential disruption wrought by AI-driven insurance fraud is a pressing concern,” said Leah Hewish (pictured), partner at Clyde & Co, in an interview with Insurance Business. “This new battleground has infiltrated claims handling across business lines.”
The Sydney-based insurance law specialist said these cases are requiring additional attention from claims teams who are already under pressure to comply with the regulator’s time-sensitive claim handling rules.
Hewish said the potential use of fraudulent supporting evidence in an insurance claim is an “urgent challenge” for insurers.
“It dramatically upsets the long-established premise that insurance policies are based on mutual obligations of good faith,” she said.
Hewish said this industry-wide issue is best addressed through partnerships and training. She referred to existing industry collaborations including the Insurance Council of Australia’s (ICA’s) counter-fraud and scams operation.
“Awareness of the proliferation of AI-driven insurance fraud is crucial, including internal training and industry collaboration relating to trends, new technology and uncovered scams,” she said.
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