UK car insurance prices may keep rising after industry experts warned that people are exploiting AI technology to defraud insurers when filing claims.
Insurance Fraud on the Rise as AI Technology Enables Sophisticated Scams
Allianz, the insurance company, warned that people are utilising AI technology developments to file claims for accidents that may not have occurred at all.
Fraudsters used to arrange “crash-for-cash” scams, but AI technology now allows them to add bogus number plates, damage, and even supporting paperwork.
In some cases found by the group, genuine automobiles may already have been written off.
Allianz reported a 300 percent increase in situations when applications were exploited to manipulate reality between 2021-22 and 2022-23.
Matt Crabtree, head of financial crime intelligence and investigation strategy at Allianz, stated: “There is some fantastic technology out there, which is making our lives so much better in many ways.
“However, the sad reality is that fraudsters are using this same technology for their own illegal purposes and to target innocent members of the public to make a profit, with total disregard for the impact to the victim.
“Although insurance fraud is evolving all the time, so are our robust controls and systems, which are designed to spot emerging trends.
“Our highly trained investigators then root out those who are trying to exploit the system, in order to protect honest customers and keep costs down.”
Scott Clayton, head of claims fraud at Zurich UK, cautioned that such crimes are on the rise, particularly as technology advances.
He stated that insurers must stay up with the technology used to detect fraudulent automobile claims.
Aviva discovered nearly 10,000 cases of fraud two years ago, saving £120 million in false claims.
UK Car Insurance Prices Fluctuate Amid Rising Fraud Concerns
As noted by Confused.com, the average UK car insurance price has risen to £941, despite a £54 decrease in the previous three months.
While many people will be relieved that vehicle insurance rates are reducing, there are concerns that costs could climb again as a result of insurers paying out fake claims to scammers.
Mark Allen, head of fraud and financial crime at the Association of British Insurers (ABI), believes that all companies should prioritise legitimate consumers.
The expert stated: “Insurers are alive to the various tactics fraudsters deploy and use sophisticated software to detect false or edited images.
“The use of technology is a key part of the insurance sector’s counter fraud weaponry and there will be no let-up in the industry’s prevention and detection of fraudulent claims, and enforcement against insurance fraudsters.”