Insurance fraud
The undue obtaining of an indemnity or cover through deception, a structural cost of the sector that generative AI turns into mass production.
In 1995, the Coalition Against Insurance Fraud put US property and casualty fraud alone at 80 billion dollars a year; its August 2022 study, extended to every line, multiplies that figure by almost four. Insurance fraud means any deception aimed at obtaining an undue indemnity or cover, from fictitious claims to inflated invoices and false declarations. It is a structural cost of the trade, estimated at around 308.6 billion dollars a year in the United States, a premium surcharge of the order of 700 dollars per household. Generative artificial intelligence does not create fraud, but it collapses its cost of production: fabricating a fake becomes instant, free and undetectable to the naked eye. This makes traditional rules-based defenses obsolete and undermines the probative value of documentary proof. The question shifts from detecting the fake to authenticating the true at the source.
Textbook case: a fraudster generates within seconds, with a simple phone, a perfectly credible fake photograph of a crashed vehicle, which the insurer's coherence filters can no longer distinguish from a real one.
insurance fraud, claims fraud, application fraud
Follow the research
One letter a week. First, the week's underwriting note, when one is published: a dated, argued decision, signed by Paul Bernardski. Then what the observatory published on cyber risk, political risk and insurance. No account, no tracking.
No spam, one-click unsubscribe, no data ever sold.